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Understanding the micro-insurance landscape in low-income communities
The challenge
Objectives
Our approach
Topic areas
Project type
Overview of health financing in Kenya
State of health service financing in Africa
● Research showed that households in developing countries spent $148 billion out-of-pocket for healthcare expenses in 2015, and each year 100 million people are pushed into extreme poverty because of the high cost of healthcare. Most Kenyans pay for their healthcare “out of pocket”. The private sector funds approximately 67% of Kenya’s healthcare sector and the public sector funds 33% of total healthcare expenditure. 45% of Kenyans forgo receiving treatment due to cost barriers for private healthcare.● When it comes to insurance, only 11% of Kenya’s population have health insurance. The National Health Insurance Fund (NHIF) coverage makes up 70% of the market share and patronage is mostly limited to those in formal employment. Public health facilities are affordable but face frequent stockouts, understaffing and negative perception of quality of healthcare due to chronic underfunding. There are many reasons for this poor uptake of health insurance, but the prime reasons include the lack of universal health coverage, expensive private health insurance and a culture that does not value health insurance. Out of 40 million Kenyans, there are 38 million Kenyans who do not have health insurance. In Kenya of those who have health insurance, 3% are mainly employer based health insurance schemes. Health care in Kenya is funded through out of pocket expenditure, government funding and donors.
*How households finance their health events.
Dealing with shocks device
Key
Sources FinAccess 2019Business of health in Africa,IMF World Bank
Health expenditure takes a up a significant portion of household income
(average amount per month of household medical expenditure )
No spend Spent up to KES 3,000
Of both genders, Living in urban areas, ages 25-39, Q2-3
50% of Kenyan households have an annual household income of KES 12,000 and under. Research shows that in 2016, annual Total Health Expenditure (THE) per capita was KES 7,800. In our research we heard in some low-income urban-based dwellings, users can spend as low as KES 200 - 1,500 at community health facilities per quarter. Other users spend a minimum of KES 2,000 - 5,000 on a single outpatient event (at mid tier health facilities) - driven by high medication and lab costs. For example, consultation for patients who don't buy medicine can range from KES 200 - KES 1,000. Tests vary between KES 500 - 5,000. By contrast, in rural areas, low-income persons spend between KES 200 - 1,500 for outpatient expenses.
Women take up greater responsibilities for healthcare of their households than men do. They form a significant portion of target market for Access Afya. Older single heads of households have fewer social safety nets and support to meet the health needs - the effect of which is amplified more in rural areas. Urban dwellers show higher digital literacy levels, 91% have access to a mobile phone, 34% own a smartphone ownership and 77% of the population have internet access. They thus have a wider pool of possible financing options for health shocks.
Sources: IPSOS 2018: Kenya Health Financing System Report, 2018, USAID & Health Policy Plus; FSD FinAccess 2019
Summary
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