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Counties face significant challenges as they continue to rely heavily on donor funding for health programmes, largely due to inconsistent disbursements from the National Treasury.

Despite making progress toward the 15 per cent Abuja Declaration target for health budget allocation, a recent report reveals that with insurance coverage at a mere 26 per cent, meaning access to treatment remains a struggle for most citizens.

The “State of Kenya’s Health Market 2024” report, a collaboration between the USAID Private Sector Engagement (PSE) Programme and the Ministry of Health, indicates that while health sector allocations have reached 11 per cent, this is still inadequate to meet current healthcare demands.

Recent allocations

In the 2024/25 financial year, the healthcare sector suffered a setback when its budget was cut by Sh14.2 billion, a significant drop from the Sh141.2 billion allocated in the 2023/24 budget. This year, the allocation stands at Sh127 billion, falling short of the Abuja Declaration target.

The report highlights that Kenya’s overall health programs are in disarray, with critical data largely held by private sector entities and not easily accessible to the public.

“Market data available in the private sector is generally unavailable to the public sector,” the report notes. Although some information can be accessed through the Kenya Health Information System (KHIS), the process is often cumbersome.

While the move toward a mandatory Social Health Insurance (SHI) scheme and support for local manufacturing offer hope for reducing healthcare costs, the lack of clear price control policies poses a significant barrier to affordability throughout the country. Prices are often set at the discretion of counties and private sector players, who may charge more than recommended margins.

Further, the report points out a major gap in healthcare demand data, with comprehensive statistics available only for family planning. Factors like financing, information access, and socio-demographic variables significantly affect healthcare demand, with insurance coverage and service access playing crucial roles.

To maintain and increase healthcare demand, the report suggests the need to enhance service provision and address shortages of healthcare professionals through initiatives like SHI.

The study examines the operational environment of the healthcare market, financial systems, supply chain management, pricing mechanisms, quality assurance, and demand assessment.

Supply issues persist, with stock often aligned to meet demand but hampered by cash flow challenges, delayed payments, and management difficulties..