Examining the Influence of Budget Formulation Structures and Processes on the Efficiency of County Health Systems in Kenya
Musiega A., Tsofa B., Nyawira L., Njuguna R., Munywoki J., Hanson K., Mulwa A., Molyneux S., Maina I., Normand C., Jemutai J., Barasa E.
Background: Public Finance Management (PFM) processes guide the translation of government resources to services and therefore determine health system efficiency. PFM processes are implemented within the budget cycle, which entails the formulation, execution, and evaluation of government budget. We examined how budget formulation structures and processes influence health system efficiency at county level in Kenya. Methods We conducted a qualitative case study of counties classified as relatively efficient (n = 2) or relatively inefficient (n = 2), as in our cases. Qualitative data were collected through document review and in-depth interviews (n = 70). We collected quantitative data from secondary sources including budgets and budget reports. We analyzed qualitative data using a thematic approach and conducted descriptive analyses of quantitative data. Results The budget formulation structures and processes influence the efficiency of county health systems by influencing the input mix, alignment of budgets with needs, and motivation and productivity of health workers. Challenges such as insufficient, delayed, and unavailable budget ceilings disrupt both the input mix and alignment of resources with actual needs. The use of line-item budgets resulted in plans that did not accurately reflect needs. Furthermore, the fragmentation of funds increases input costs. Limited stakeholder participation negatively influenced the input mix, budget alignment, and health worker motivation. Finally, priority setting that lacked evidence-based information led to a mismatch between needs and resource allocation. Conclusion This study highlights six aspects of the budget formulation process in Kenyan counties that need to be strengthened to enhance health system efficiency: budget ceilings, budget structure, participatory budget formulation, pooling of health funds, priority-setting processes, and the budget approval process.