This presentation was given at the pay-for-performance workshop in Tanzania, November 2015

1. Tracking implementation and (un)intended
consequences of peripheral health facility
financing mechanisms in Kenya
P4P workshop – Evelyn Waweru April 2015
POLICY
PROCESS
CONTEXT ACTORS

2. Outline
▪ Background: Kenyan health sector policy reforms
▪ What is DFF and HSSF and how its supposed to work
▪ Experiences with implementation of HSSF
▪ Current proposal and way forward
NB: Peripheral health facilities = public health
centres and dispensaries

3. Health Sector Services Fund (HSSF)
▪ Background: need to improve the efficiency, quality, equity
and sustainability of primary care provision in developing
countries and guided by global debates on UHC,
decentralisation and community participation.
▪ An innovative GOK scheme to:
- Disburse funds directly to peripheral facilities
- Empower local communities through Health Facility
Management Committees (HFMCs)
▪ Overall goal:
- Generate sufficient resources for providing curative,
preventive and promotive services
- Reduce user fees paid
- Account for the resources in an efficient and transparent
manner

4. Parliament
Treasury
Central Bank of Kenya
HSSF Account
HFMC (Facility
Commercial Bank
Account)
FBO Facilities /
Private Sector
Commercial Bank
Accounts
Donors
Minister
MOPHS
PS
MOPHS
(HSSF Secretariat)
National Health Services
Committee
DHMT Commercial
Bank Account
Disbursement of funds
Authority to Incur Expenditure (AIE)
Funds distribution schedules
District Treasury
PHMT Commercial
Bank Account
Ministry of Finance
HSSF Budget estimates
Budget Approval
HSSF Secretariat
Commercial Bank
Account
Source: Guidelines on Financial Management for the Health Sector Services Fund
HSSF Funding and Disbursement Pathways
Funds transfer

5. ▪ HSSF Funds cover: Facility operations and maintenance;
should not cover: Drugs, personal expenses and non-voted
items
▪ Planning: Involve stakeholders (HFMC) in making AWPs and
QIPs which then translate to facility and sub-county
budgets
▪ Funds managed by the HFMC:, according to financial
guidelines approved by MOH
▪ Spending: only on receipt of an Authority to Incur Expenditure
(AIE) from national level
▪ Accounting and financial management: facility monthly
reports counter-checked by county accountant
▪ Supportive supervision: DHMT and (CBAs) hired specifically
How should HSSF work

6. Experiences with HSSF implementation

7. Key research findings
▪ Coast pilot: small increases in
the funding available for the
day to day running of facilities
greatly improved facility
functioning and perceived
quality of care
▪ Most facilities were ready to
receive HSSF:
- Bank account
- Functioning HFMC
- Some training – more emphasis
on financial management
▪ Associations between health
facility characteristics and the
poverty level of the facility
location
- No major inequalities in
inputs, there was need for an
Health Policy and
Planning

8. 0.9% of total ‘on-budget’ health sector budget

9. HSSF Interim process evaluation: Findings
▪ KSH 112,000 (1,339 USD) per health centres
▪ KSH 27,500 (327 USD) per dispensaries
▪ KSH 131,500 (1,565 USD) per DHMTs
Per quarter

10. Perceived positive impacts
▪ Funds were reaching facilities
▪ Visible improvements in facilities
▪ More reported outreach activities
▪ Improved perceived quality of care, staff
motivation and patient satisfaction
“of course the quality of care has improved; initially if you
didn’t have gloves you would tell a client- sorry we can’t help
you”
(Health Centre In-charge)
▪ Participation, transparency and accountability
- Active involvement of community members through
HFMCs
- Greater transparency and improved oversight of user fee
revenues

11. HSSF Implementation Challenges and
ways of fixing them

12. Challenges in financing
▪ Delays in receiving funds: AIEs were also fixed
“a straight jacket on HSSF because they had given us sort of
an AIE …it has to be utilized on the item which is indicated ”
(HFMC member) – fixed by annual AIEs; working on flow of
funds
▪ Inadequate level of funds – working on increasing county
buy in and discussions with donors on a pooling system
▪ Compensation for removed user fees – flat rate, RAC and
utilisation
▪ Low allowances for HFMCs “peanuts” no incentives for
staff – mixed opinions
▪ Different donor opinions
“the lack of the involvement of the district treasury is the
Achilles heel of HSSF” (National KI) – ongoing dialogue with
donors and the Council of Governors

13. Supportive supervision and accountability
▪ Lack of training on
financial management
▪ Lack of facilitation and
systematic M&E
▪ Understanding of roles
and responsibilities
▪ Overworked CBAs
▪ Reluctant in-charges
“Kwamad with terror”
(National KI)
[At the DHMT level] you are
actually doing an accountant’s
work and you’ve never trained
for it ...you can be taught for 3
days or 5 days and you think you
get it, [but] you keep on
forgetting … (DHMT member).

14. Unintended consequences
▪ Complex reporting and documentation: time consuming –
priority documents to submit to CBA
▪ Difficulties in adhering to the rules of spending: flexibility –
need for clear and comprehensive guidelines
▪ Bypassing the district treasury
– They (CBAs) are not linked with the District Treasury for
technical support and integration within DHMTs remains weak
and accountants are not always included during supervision visits
to facilities’ (2013 Aide Memoire). – still an issue with the county
treasury now having more decision power over county spending
▪ Relationship problems between key stakeholders
– Diff views on how HSSF should work after devolution –
compounded by devolution and politicians influence on the
HFMC

15. Items required for financial management of
HSSF at facility level
(Source: Managing the HSSF – An Operations Guide)
Guidelines and Reference Documents
• Managing the HSSF – An Operations Guide
• Guidelines on Financial Management for HSSF
• Chart of Accounts
Registers / Books to be completed
• Memorandum Vote Book (MVB)
• Receipt Book
• Facility Service Register (FSR)
• Cash Book
• Cheque Book Register
• Fixed Assets Register
• Imprest Register
• Consumables Stock Register
• Store Register
• Counter Receipt Book Register
Other items
• Cheque book
Forms / Vouchers
• Receipt Vouchers (F017)
• Payment Vouchers (F021)
• Travel Imprest Form (F022)
• Local Purchase Orders (LPO)
• Local Service Orders (LSO)
• Request for Quotations (RFQ)
• Stock Cards for all items in stores
• Imprest Warrants
• Bank Reconciliation forms (F030)
• Counter Requisition and Issue Vouchers (S11)
• Counter Receipt Vouchers (S13)
• Handover Forms
• Monthly Service Delivery Report Forms
(MOH105)
• Monthly Financial Report forms (MFR)
• Monthly Expenditure Report forms (MER)
• Quarterly Financial Report forms (QFR)
Only financial! There are numerous other daily registers and monthly
reports to fill

16. Re-organisation of the Kenyan health
system!
• Devolution: 47 new semi-
autonomous counties (control
decisions)
• User fee “removal” + free
maternal (P. Directive)
• Debate on future HSSF design
o funds be controlled at county of
national level?
o integrated into standard
government financial systems? Role
of insurance?
o performance related?

17. Conceptual framework : How HSSF is to function in a devolved health
system context
• 1.
• Use of Funds
• 2.
• Access rules
• 3.
• Human resource
• 4.
• Governance /
• accountability
• 5.
• Resource Allocation
• PBF?
Context: Peripheral facility funding regulatory/legislative frameworks, policies and priorities of
national government, international organisations, and county government
Consequences for peripheral health
facilities
Facility
income &
expenditure
Adherence to
user fee
regulations
Internal & community
accountability
Health worker
motivation
Perceived
Quality of
care
Utilisation
5 key decision making domains: theory and practice

18. Way forward?
▪ Different counties different health system structures
and varying levels of control of funds
▪ New financing mechanisms:
– Reimbursements for user fees (flat rate, with talks of
linking amounts to facility utilisation)
– Reimbursements for free maternity health services (2500
per delivery)
– DANIDA funds (last financial year)
– NHIF?
– OBA: selected counties (complementary to FMS but with
staff incentives)
– PBF: pilot
▪ Data analysis and feedback – research to policy,
implementation research?
▪ Next steps: PBF checklist?

19. Knowledge Gaps around HSSF
• Continuity, transition period, future
politics
• Flexibility in design
o funds be controlled at county of national level?
o integrated into standard government financial
systems? Role of insurance?
o performance related?
• Best methods for evaluation – and
balancing mixed methods

20. Acknowledgements
▪ Supervisors: Drs Sassy
Molyneux, Catherine
Goodman
▪ Co-investigators:
Benjamin Tsofa, Mary
Nyikuri, Jacinta Nzinga,
Edwine Barasa, Jane
Chuma, Anisa Omar,
Timothy Malingi
▪ Research participants