Examining the Influence of Public Financial Management Processes and Practices on the Efficiency of County Health Systems in Kenya

Abstract

Public Financial Management (PFM) processes and institutions are an important determinant of the efficiency of the public health system particularly in low- and middle-income countries where there are numerous challenges. These challenges include; poor budget structures, misalignment of plans and budgets, fragmented revenue streams, low budget credibility,inefficient procurement processes, ineffective controls, and insufficient monitoring and evaluation mechanisms. There are also conflicts in the relationship between the institutions involved in the PFM process, especially the ministry of health and finance ministry. While some of these challenges are well documented, there is limited knowledge of how these challenges compromise health system efficiency. I examined how elements and processes of the PFM cycle - the budget formulation, budget execution, and budget monitoring processes influence county health systems' efficiency in Kenya. I employed a qualitative case study design that entailed budget data analysis and a qualitative cross-sectional examination of the relationship between PFM and efficiency using in-depth interviews and document reviews. I used descriptive statistical analysis to analyze the quantitative budget data collected from document reviews and employed thematic analysis to analyze the in-depth interviews. I found that the budget formulation, execution and monitoring, and accountability processes influenced the efficiency of county health systems by influencing the input mix within health systems, the cost of inputs, the motivation and productivity of human resources for health, and the responsiveness of the budget to health system needs. To enhance the efficiency of county health systems, I recommend implementing various policy measures throughout the PFM process. In budget formulation, it is advisable to use a Medium-Term Expenditure Framework (MTEF) to guide allocations, provide timely budget ceilings, allocate sufficient resources to health, cascade budget ceilings to facilities, and involve facilities in budgeting and planning, develop and use Programme Based Budgets (PBBS), pool health sector funds, promote stakeholder participation in budgeting and planning, and base decision-making on evidence. In budget execution, the government should avail promised funds, prioritize payments based on County Department of Health (CDOH) priorities, ensure timely procurement process, enhance facility managers’ autonomy, and include facilities in the financial management information system. In budget monitoring and oversight, the government should clearly demarcate roles for implementing and oversight stakeholders, enhance civic education to improve the population’s budget literacy, fully operationalize the sector working groups and the county health stakeholder’s fora, utilize synchronous accountability mechanisms, provide feedback following monitoring mechanisms, implement existent sanctions for inefficiency and rewards for efficiency, and finally the government should increase budget transparency.