How Does Capacity in Health Financing Impact the Alignment Between Priorities and Expenditures in the Health Sector: A Case Study of Kenya and Mozambique

Abstract

Background: Governments engage in setting health sector priorities among competing interests to maximize health system goals within the available resources. This is important as misalignment between health priorities and budget allocations can lead to low budget allocations and underspending in the health sector. Goal: The goals of the study are twofold. First, measure the extent of alignment between a stated government priority and actual government expenditure. Second, if there is misalignment, explain the underlying bottlenecks including institutions, structures, and capacities. Method: The study focuses on one stated health sector priority shared between Kenya and Mozambique, which is improving geographical equity of governmental resources for health. An explanatory mixed methods design is used, in which quantitative analysis is followed by a qualitative assessment. In quantitative analysis, Gini index is used to summarize the differences in per capita health expenditures across regions. In addition, health expenditure is decomposed as a product of total budget, health budget priority, and health budget execution to identify whether resource allocation or resource utilization lead to geographical inequity. The qualitative assessment consisted of 23 semi-structured key informant interviews, 10 for Kenya, 11 for Mozambique, to explain the quantitative results. Results: In both Kenya and Mozambique there is geographical inequity in government health spending, which is inconsistent with the stated government priority (Gini greater than zero). The decomposition of health expenditure suggests that, in Kenya, the misalignment is driven by both resource allocation and utilization processes; in Mozambique, it is driven largely by the resource allocation process. The qualitative analysis reveals several bottlenecks that are common between the two countries. At the institutional level, there is institutional separation between planning and budgeting, decision-making is ad hoc, and difficult decisions on hard choices and tradeoffs are left to the end of the budget process. At the structural level, rapid and unplanned decentralization in Kenya and the deconcentration model in Mozambique have led to inadequate structures to align planning and budgeting. At the capacity level, there are too many administrative demands on planning and budgeting staff, who also lack technical expertise and adequate data to make evidence-based decisions.