CORE PACKAGE FINAL REPORT:
Improving Access to Family
Planning Services in Public
Sector Facilities for
Poor/Underserved
Populations in Kenya
POLICY Project
November 2005
This publication was produced for review by the United States Agency
for International Development. It was prepared by the POLICY Project.
Improving Access to Family
Planning Services in Public
Sector Facilities for
Poor/Underserved
Populations in Kenya
POLICY Project
November 2005
The POLICY Project is funded by the U.S. Agency for International Development
(USAID) under Contract No. HRN-C-00-00-00006-00. POLICY is implemented by
Futures Group in collaboration with the Centre for Development and Population
Activities (CEDPA) and Research Triangle Institute (RTI). The views expressed in this
report do not necessarily reflect those of USAID or the United States government.
Contents
Abstract
iii
Abbreviations
iv
I. Introduction
1
II. Context and Policy Environment
3
III. POLICY Core Package Activities and Results
7
IV. Key Research Findings and Stakeholder Recommendations
10
V. Conclusion
19
Kenya Core Package Final Report
ii
Abstract
The POLICY Project implemented a core package of research and technical assistance to
assist the government of Kenya in understanding the costs associated with the provision
of family planning (FP) services over the period from 2003–2005. In implementing the
financing part of the package, special attention was paid to addressing the needs of the
poor, with free or highly subsidized services being delivered to such groups. This subsidy
aspect of the package was introduced at the stage of developing guidelines for the
implementation of user fees, waivers, and exemptions. Implementation of user fees was
designed to generate revenue to maintain availability of FP services and strengthen the
quality of those services while expanding access to the poor and underserved. Activities
included analysis of current fee charging practices; analysis of operational policies
affecting FP fees, waivers, and exemptions; market segmentation analysis; review of
willingness and ability to pay; and development of draft pricing guidelines for FP
services. POLICY core package activities led to a critical change of position on the
merits of cost sharing by the Ministry of Health. The draft pricing guidelines will enable
the government to enact an effective, evidence-based approach to implementing user
fees, waivers, and exemptions for FP services. These results will ultimately lead to
improved access to high-quality FP services for all social groups, including the the poor
and currently underserved populations.
This report documents the POLICY Project’s core package in Kenya, taking into
consideration the family planning and economic context in which the FP services are
provided; key stakeholders; activities and products; key research findings; and lessons
learned. The FP financing experience in Kenya has potential for replication in other
countries.
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Abbreviations
AIDS
DFID
DHMB
DHMT
DRH
FP
GOK
HIV
IUD
DHS
KFW
Ksh
MCH
MOH
NCPD
NGO
NHSSP
PGH
PHMT
PMO
RH
SES
STI
TFR
UNFPA
USAID
WHO
acquired immune deficiency syndrome
Department for International Development (United Kingdom)
District Health Management Boards
District Health Management Team
Division of Reproductive Health
family planning
government of Kenya
human immunodeficiency virus
Intrauterine contraceptive device
Demographic and Health Survey
Kreditanstalt für Wiederaufbau
Kenya shilling
maternal and child health
Ministry of Health
National Coordinating Agency for Population and Development
nongovernmental organization
National Health Sector Strategic Plan
provincial general hospital
Provincial Health Management Team
Provincial Medical Officer
reproductive health
socioeconomic status
sexually transmitted infection
total fertility rate
United Nations Population Fund
United States Agency for International Development
World Health Organization
Kenya Core Package Final Report
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I.
Introduction
Despite a historically strong performance, Kenya’s family planning (FP) program is
showing signs of stagnation, as evidenced by a slowing or reversal of progress in its
fertility and contraceptive use indicators in the 2003 Demographic and Health Survey
(DHS).
In response to declining public funding for FP services and to stimulate demand for FP
services by improving quality, the government of Kenya (GOK) has indicated a
commitment to introducing cost sharing for public health services, including family
planning. At the same time, the government remains strongly committed to expanding
access to health services among those who cannot afford to pay. Therefore, the
introduction of user fees for FP services has been controversial. In addition, there has
been a lack of consistency in the application of user fees, waivers, and exemptions in
current practice. Facilities must charge fees to maintain the availability of services, but a
lack of data on costs, the absence of clear guidelines on pricing, and ineffective
implementation of existing policies have led to substantial variations in fees and the
application of waivers and exemptions across different facilities. As a result, it is likely
that the poor and other underserved populations are being denied access to FP/RH
services because they are unable to pay. Facilities are not generating enough revenue to
ensure the quality and sustainability of services, and user fees are not used appropriately
and effectively to improve service quality.
In response to this situation, the POLICY Project implemented a core package of research
and technical assistance to assist the government in understanding the costs associated
with the provision of FP
services, appropriately targeting
resources to the neediest groups
for free or reduced-price
services,1
and
developing
guidelines
for
the
implementation of a user fee
and waiver/exemption structure
that will generate sufficient
revenue to maintain availability
of FP services and strengthen
the quality of those services
while expanding access to the
poor and underserved.
POLICY core package activities led to a critical change of position on the merits of cost
sharing by the Ministry of Health (MOH). POLICY helped to draft pricing guidelines that
will enable the government to enact an effective, evidence-based approach to
The term “targeting” in this report refers to targeting of public sector resources to the neediest
groups.
1
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implementing user fees, waivers, and exemptions for FP services. These results will
ultimately lead to improved access to high-quality FP services for the poor and
underserved populations of Kenya.
This report documents the POLICY Project’s core package activities and key findings in
Kenya. The following section introduces the FP and economic context in Kenya,
stakeholders, and analytic frameworks. Section III describes the activities undertaken and
results achieved by the POLICY Project, including research and analysis, gaining
stakeholder consensus on findings, and development of pricing guidelines. Section IV
reports key findings from the user fee and market segmentation analyses and conclusions
from the dissemination workshops. The final section discusses lessons learned and the
potential impact of the research findings and guidelines developed under this core
package.
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II.
Context and Policy Environment
Family Planning and Economic Context
Historically, Kenya’s FP program has been one of the strongest in sub-Saharan Africa.
Kenya has experienced substantial fertility decline during the past 30 years. In the late
1970s the total fertility rate (TFR) exceeded 8.0. The 1998 Kenya DHS reported a decline
to 4.7. The contraceptive prevalence rate for currently married women was 39 percent,
and for modern methods it was 32 percent. However, unmet need for family planning
remained high, with 14 percent of married women having an unmet need for spacing
purposes and 10 percent for limiting.2 Despite this unmet need, the use of modern
contraceptives in the country increased significantly, resulting in a notable decline in
fertility rates and marked improvement in the quality of life and health of women and
children.
The 2003 DHS depicted a worsening FP/RH situation. The TFR remains high at 4.9.
There remains a substantial unmet need for family planning services: 25 percent of
married women of reproductive age had an unmet need (spacing and limiting) for family
planning. The reproductive-age population, especially those aged 15–29 years, is growing
fast. The female population aged 15–29 is expected to increase by 50 percent between
2000 and 2020. The contraceptive method mix has become more concentrated on spacing
methods, especially on the relatively expensive injectable. The proportion of men and
women using longer-term, more cost-effective methods (IUD, male/female sterilization)
has declined significantly, even though an increasing proportion of users want to prevent
rather than space future births. The number of contraceptives delivered to service
delivery points declined between 2000 and 2001 and, as a result, both the growth in
contraceptive use and decline in fertility have plateaued. 3 There is evidence of growing
numbers of unsafe abortions, especially among young women.
Effective government policies and strategies to guide decisionmaking are lacking in
many key areas, including generating and allocating financial resources, improving
quality of services, and matching the contraceptive method mix to women’s and couples’
needs and desires.
2
Unmet need for spacing includes pregnant women whose pregnancy was mistimed, amenorrheic
women whose last birth was mistimed, women who are neither pregnant nor amenorrhoic and who
are not using any method of family planning and say they want to wait two or more years for their
next birth, and women who are unsure whether they want another child or who want another child
but are unsure when to have the birth. Unmet need for limiting refers to pregnant women whose
pregnancy was unintentional, amenorrheic women whose last child was unintentional and women
who are neither pregnant nor amenorrheic and who are not using any method of family planning
and who want no more children. Excluded from the unmet need category are pregnant and
amenorrheic women who became pregnant while using a contraceptive method (these women are
in need of better contraception).
3
POLICY Project, FHI, Deliver Project, and USAID/Kenya. 2001. Contraceptive Commodities
Needed, 1998–2005, and Delivered to Outlets, 1998–2001. Nairobi: POLICY Project.
Kenya Core Package Final Report
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Economic indicators remain poor. The 2004 poverty rate was 60 percent, and the 2002
Gross National Income per capita was US$360. Per capita government budget allocations
to health are less than US$5. In 2001, GOK health spending was 6.2 percent of total
government budget, well below the 15 percent target set by the Abuja Declaration. The
entire health sector is grossly under-financed, and there is no single budget line for FP
services and commodities. Per capita government allocations to the health sector have
declined by more than half during the past 20 years, and by more than two-thirds in real
terms (now about $3 per capita). There is also evidence that the attention of political
leadership, the government, and development partners has increasingly shifted to the
country’s HIV/AIDS program at the expense of family planning. There is now more
support for the HIV/AIDS program in terms of attention, resource allocation and highlevel commitment, with family planning increasingly receiving less attention and
financial support.
Kenya is heavily dependent on donors for the provision of FP services and commodities.
Donors fund 100 percent of the costs of all contraceptive commodities except condoms, 4
including all contraceptives provided by nongovernmental organizations (NGOs).5 There
is growing donor fatigue over escalating commodity costs. As part of the response to
declining public sector resources, over the past decade the GOK has been implementing a
“cost-sharing” program in the health sector, under which fees are charged to service
recipients to cover part of the costs. In its new National Condom Policy and Strategy,6 for
instance, the government has made the long-term commitment to gradually introduce fees
for all public sector health services, including family planning, in an effort to shore up the
health system and expand access. At the same time, the government is committed to the
effective application of a system of waivers and exemptions7 from fees for poor clients
and other designated groups (e.g., youth, persons living with HIV/AIDS).
According to the MOH fee guidelines (last reviewed in 1994), MCH/FP and antenatal
and postnatal services are to be provided free. In practice, however, public health
facilities have put in place an “access fee” under the direction of the District Health
Management Boards (DHMBs). Typically, these are as follows: Ksh. 20–100 at the
registration desk to gain access to all services; a “commodity fee” of about Ksh. 50 per
visit, usually dependent on the client’s method choice; and a “supplies fee,” dependent on
the availability of items such as paraffin, gloves, cotton wool, needles, and syringes.
4
In late 2000, the GOK made the decision to use $10 million in World Bank loan funds to procure
300 million condoms during 2001–2004. This is expected to meet 80–85 percent of the public
sector condom needs during this period.
5
Although donors fund the procurement costs of all contraceptive commodities except condoms,
about 75–80 percent of total FP-related costs are met by the GOK through provision of personnel,
facilities, and other infrastructure and support activities.
6
National Condom Policy and Strategy, 2001–2005, Republic of Kenya: Ministry of Health in
collaboration with the National AIDS Control Council, September 2001. The POLICY Project
was the principal source of technical assistance to the Ministry of Health in the formulation and
adoption of this national policy and strategy.
7
A waiver is a release from payment based on financial hardship and is not automatic. Clients
must request waivers and a judgment is made to determine the deserving cases. An exemption is
an automatic excuse from payment based on MOH conditions.
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Whereas previous studies suggest there is substantial willingness and ability to pay such
fees, several issues remain unclear, such as the actual charges at the operational level by
facility type, socioeconomic status, and gender of clients; the basis for setting the fee; and
mechanisms in place and utilized to provide effective access to FP services by the poor
(e.g., waivers and exemptions). Available evidence suggests that funds from FP services
typically subsidize other departments or are used for non-service related purposes (e.g.,
staff welfare activities such as transportation to funerals) rather than being used to
improve the quality of FP services (as required by the Exchequer and Audit Act) and
thereby the utilization of services.
In spite of the MOH cost-sharing guidelines that outline the existence of waivers and
exemptions for the provision of health services, including MCH/FP, in public hospitals,
the system remains ineffective in its implementation. It continues to be characterized by
leakage of benefits to undeserving cases, manipulation, and a lack of clear eligibility
criteria. In addition, public health facilities have limited their provision of waivers and
exemptions, citing declining resources from the central government as a reason. The
situation is worse with respect to FP/RH, where the MOH has remained silent on fee
policy.
It is highly likely that with increasing poverty levels, the poor and other underserved
populations are being denied access to FP services on the basis of inability to pay.
Against the background of government’s commitment to address poverty issues in its
blueprint for development, “Economic Recovery Strategy for Wealth and Employment
Creation,” the strengthening of the system of waivers and exemptions is critical. There is
an urgent need to re-examine the levels of fees charged for FP services and to put in place
operational policies that provide a safety net to mitigate against the adverse effects of cost
sharing.
Stakeholders
Various stakeholders play a key role in the financing of FP services and commodities in
the public health sector and in enhancing access to FP services among the poor and
underserved:

Government institutions entrusted with FP issues include the Ministry of Health
(MOH) Division of Reproductive Health (DRH), and the Ministry of Planning
National Coordinating Agency for Population and Development (NCPD). The MOH
is entrusted with the responsibilities of coordination, policy development and
implementation, quality control, resource mobilization, monitoring and supervision,
and development and issuance of pricing guidelines.

Development partners and related technical agencies (WHO, USAID, UNFPA,
DFID, KFW) provide technical assistance in such areas as the development of
guidelines and policies, systems strengthening, capacity building, and resource
mobilization.
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
Provincial level stakeholders, such as the Provincial Health Management Team
(PHMT) and Provincial Medical Officers (PMO), are responsible for monitoring and
supervision.

District level stakeholders (District Health Stakeholders Forum, DHMB, District
Health Management Team (DHMT), District Treasury) develop and implement
district FP/RH workplans, review reports on the implementation of FP/RH programs
at the district level, arrange for annual auditing of the FP/RH funds, and carry out
needs assessments for family planning and capacity building.

Private sector and NGO partners form partnerships with the national government to
deliver FP/RH services more efficiently and effectively at a modest fee.

Communities undertake health education and distribution of certain commodities.

Households are the direct beneficiaries of FP/RH services.
Why Support Family Planning?
Family planning services are a key component of the healthcare package of ministries of
health and social services. By preventing mistimed pregnancies and empowering women
to space births appropriately, family planning promotes the health of women and,
therefore, that of the whole family because the family—especially in developing
economies—depends on adult women for essential daily provisions such as food, water,
and the care for children and the elderly. For cultural reasons, however, FP services are
perceived to benefit only women. In Kenya as in most other developing countries,
women lack power in resource allocation decisions within the family. They are also
under-represented in government. As a result, FP services tend to be under-provided and
under-financed both by the family and the government. Moreover, women under-utilize
FP services even when available,
because they face financial and social
constraints in using these services.
Therefore, a need exists to make FP
services not only available but
accessible to all women, especially the
poor and the under-served. However, to
ensure sustainability of the services,
those able to pay should contribute to
the cost of service delivery, but fee
subsidies and waivers should be
designed for the poor. In order to set
appropriate user fees and subsidies, information is needed on costs of delivering basic FP
services. Such costs are reported here for Kenya for the first time.
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III.
POLICY Core Package Activities and Results
The overarching objective of this core package was to improve financial access to FP
services by identifying and resolving cost barriers to access to FP services for women or
couples who have very low incomes or are in other underserved groups. The following
three objectives were identified for the package:

Enhance access to FP services among the poor and underserved by assuring that
waivers and exemptions are appropriately applied to those who need them.

Ensure that revenues generated from FP-related fees are retained and used to
improve the quality of FP/RH services.

Generate additional revenues to move the public sector toward eventual financial
sustainability in the delivery of FP services, including management and logistics
systems.
POLICY obtained final approval from the MOH and USAID/Kenya to proceed in
implementing this core package in November 2002. POLICY then initiated a set of
interventions to develop a draft Guideline for Pricing FP Services and Commodities in
Public Sector Health Facilities. The guideline document is directed to the public health
managers involved in the provision of FP services and commodities. It provides policy
direction on organization and management for efficient delivery of high-quality services,
effective costing and pricing for sustainability, and ways to enhance equity and access.
Ultimately, it seeks to enhance access to FP services among the poor and underserved by
assuring that waivers and exemptions are available and appropriately targeted to those
who need them. It will also be used to ensure that those revenues generated from user
fees are retained and used to improve the quality of services.
To inform the development of the guideline, the core package conducted research
activities to examine the financing of FP services in a market system characterized by
partial subsidies, user fees, waivers, and exemptions. This research applied elements of
the POLICY Project’s framework for reforming operational policies8 through a
participatory process to address the need to provide financial access to FP services for
poor and underserved populations in Kenya. The focus was on financial access rather
than all barriers, because of the recognition that, although FP commodities are provided
free by the donors, facilities need to raise revenue from users to deliver the commodities
and ensure sustainability. POLICY examined operational policy issues in two key areas:


Fees, waivers, and exemptions for FP services
Targeting of services to low-income households and other priority groups
8
Operational policies are the rules, regulations, codes, guidelines, plans, budgets, procedures, and
administrative norms that governments use to translate national laws and policies into programs
and services. See Harry Cross, Karen Hardee, and Norine Jewell. 2001. “Reforming Operational
Policies: A Pathway to Improving Reproductive Health Programs.” POLICY Occasional Paper
No.7. Washington, DC: Futures Group, POLICY Project.
Kenya Core Package Final Report
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Activities were implemented within the context of MOH institutional structures to
provide an on-the-ground test of interventions and to maximize the possibility for scaling
up to the national level in a sustainable manner. It was a highly consultative process that
engaged stakeholders at all levels, from high-level policymakers to lower level district
institutions. The implementation of the core package activity was designed to allow the
results from related components to reinforce each other and foster synergy with activities
funded by field support. The analyses were undertaken sequentially to allow for the
integration of the results at the various stages of analysis and to avoid spreading the
research capacity too thin.
POLICY implemented the following specific activities under this core package:
Research and Analysis

Analysis of current fee charging practices. POLICY obtained general information on
FP pricing and access issues at the operational level, as well as actual charges being
imposed by the facilities and their basis.

Analysis of operational policies affecting FP fees, waivers, and exemptions.
POLICY assessed existing mechanisms to address access by the poor and
underserved populations, and systems in place to enforce compliance with fees,
including related monitoring and evaluation mechanisms.

Two market segmentation studies. Using data from the welfare monitoring survey
collected by the Ministry of Planning Central Bureau of Statistics in 1994, the project
conducted a market segmentation analysis to help identify those population groups to
which public sector FP service providers should target their services. On release of
the 2003 DHS, POLICY undertook a second market segmentation analysis to provide
more updated information on the performance of the Kenya FP program, considering
among other aspects, usage of modern contraception across socioeconomic groups
and choice of provider.

Review of willingness and ability to pay studies. POLICY reviewed several studies
on ability and willingness to pay for services that have been carried out during the
past several years in Kenya.
POLICY summarized the findings and
recommendations for use in developing the pricing guidelines and for the policy
dialogue associated with that process.
The end results of these studies were the following reports:



Improving Access to Family Planning Services in Public Health Facilities by the
Underserved Populations in Kenya
Two market segmentation studies, Segmentation in the Markets for Family
Planning and Reproductive Health Services in Kenya: A Statistical Exploration
of Equity and Access Issues (2004), and Kenya Market Segmentation (2005)
User Fees in Maternal Health Services
Kenya Core Package Final Report
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The reports detail information such as the actual charges on the ground, suggested fee
structures, and mechanisms to enhance access to FP and maternal health services by the
poor and underserved populations, and strategies for improving service quality.
Stakeholder Consensus on Findings
POLICY disseminated the preliminary research findings at a workshop held in September
2004 to inform stakeholders, obtain consensus on research findings, and achieve
agreement on the development of guidelines for FP charges, waivers, exemptions, and
utilization of revenue generated to improve the quality of FP services. POLICY produced
reports on the findings and recommendations of these workshops.
Development of Guidelines
In follow-up to the studies and with technical assistance from POLICY, several MOH
departments used this information to draft the Guideline for Pricing FP Services and
Commodities in Public Sector Health facilities. The draft included guidelines for FP
charges, waivers, exemptions, and utilization of revenue generated to improve the quality
of services. These are based on the results and recommendations of the core package
assessments and analyses; POLICY’s general studies on public health sector fee setting,
waivers and exemptions; and the Contraceptive Commodities Policy and Strategy.
POLICY, jointly with the DHCF and DRH, convened and facilitated a workshop for the
facilities that participated in the study, medical superintendents from PGHs and selected
district hospitals, RH coordinators, and the pilot hospitals to review the guidelines. A
further revision was undertaken based on the workshop recommendations. The draft was
finalized, revised and submitted to the MOH DHCF in June 2005 for approval.
The draft guideline and reports from the core package initiative have informed the equity
and access components of various RH policy documents, including FP/RH Policy
Guidelines and Standards for Service Providers, and the National RH Policy and the
National Health Sector Strategic Plan 2005–10.
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IV.
Key Research Findings and Stakeholder
Recommendations
This section presents findings from the core package research and analysis activities,
followed by stakeholder recommendations based on the findings, emanating from
dissemination workshops held to gain consensus on key findings.
Enhancing Access to FP Services in the Public Sector
The government’s intentions to introduce user fees for FP services will undoubtedly
adversely affect access to these services by the poor and underserved unless there is clarity
in policy direction with respect to the following issues:




The actual amount of user fees for services and commodities
The basis upon which the user fee is set and its effects on utilization
A determination of the levels of fees that are affordable
The administration of an effective system of waivers and exemptions that is
consistent with the principles of equity and efficiency
POLICY provided the MOH with assistance to investigate these issues for purposes of
developing an appropriate pro-poor fee structure that will ensure affordability of the FP
services and commodities in the public sector. POLICY provided technical assistance in
the design of research tools, data collection, and analysis of current FP fee-charging
practices and operational policies affecting the implementation of waivers and
exemptions. The survey covered public health facilities in seven districts.9 Respondents
included the administrative staff in charge of MCH/FP clinics, FP clients, members of
hospital management boards, health center management committees, and selected PMOs
and RH coordinators. Findings from the study included:

Whereas the latest MOH fee guidelines (1994)
provide for MCH, FP, antenatal and postnatal
services to be given free in the public sector, there
are widespread charges for these services. This was
attributed to the facilities’ need to provide for
complementary inputs, improve quality, motivate
staff, and increase sustainability of services.

The facilities have established their own fee
determination criteria under the DHMBs without
reference to the MOH DHCF as required. In most
cases, the charges are not related to the costs of
services but rather by prices charged by nearby
clinics, population characteristics, communities’
9
These include the following districts: Bungoma, Kakamega, Kisumu, Mombasa, Nakuru, Nyeri,
and Thika.
Kenya Core Package Final Report
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ability to pay, perceived quality of services offered, and local economic
conditions. Types of fees charged included an “access fee” of Ksh. 20-100 for
registration; a “commodity fee” of about Ksh. 50 per visit, usually dependent on
the client’s method choice; a “supplies fee” dependent on the availability of items
such as paraffin, gloves, cotton wool, and syringes; and “motivation fees” for
staff.

In addition to FP user charges, there have been frequent ad hoc fee increases
(e.g., for registration, commodities, motivation, etc.), which have adversely
affected utilization of all health services. This suggests that some segments of the
population will still need substantial subsidies under the current system.
However, exchequer funds for recurrent spending do not come when needed and,
in most cases, are not enough. Without cost sharing, the facilities may close
down or provide services of very low quality, and this risk of closure or inability
to operate at an acceptable level discourages the granting of waivers by facilities.

The poor need assistance to access FP services, which could be achieved through
the system of waivers and exemptions that have been applied in many public
health facilities. This system has been preferred to the government’s previous
policy of ‘means testing,’ whose application failed in many facilities. Eligibility
into the system is dependent on observations and/or investigations of a client’s
attributes, for instance, hair style, mode of dress, transport to facility, person
accompanying client, and/or last eaten meal. Though the system has been
implemented with some level of success, its main constraints include abuse by
the staff, difficulties in validation, and limited public awareness.

The MOH prescribes a graduated fee structure in facilities at higher levels of the
health systems that charge more than those at lower levels. In practice, the
graduated fee structure has not been followed; there is evidence of health centers
charging far much more than the provincial general hospital (PGH).

Many health facilities have used the funds generated to improve the quality of
services, but some still use the funds from FP services to subsidize other
departments or for non-service related purposes, such as funeral attendance.
Market Segmentation Analysis Using the 1994 Welfare Monitoring Survey Data
In this first of the two market segmentation studies, POLICY used data from the welfare
monitoring survey collected in 1994 by the Central Bureau of Statistics, Ministry of
Planning and National Development. The results derived from these data depict patterns
of utilization of FP services in Kenya some 10 years ago, providing a valuable historical
backdrop to the findings obtained with the more recent data collected in 2003 as part of
the DHS. The main findings from the analysis of 1994 data are as follows:

Literacy, age, poverty, area of residence, and user fees are the main determinants
of the observed patterns of utilization of FP/RH services, and are the sources of
segmentation in the markets for these services.
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
The pill and injectable were the most common methods of contraceptives among
all sexually active women in 1994, but these modern and more effective FP
methods were used mainly by urban women in the highest income quintile, 53
percent of whom had at least a secondary level of education. The use of
traditional and less effective FP methods was concentrated among rural women
in the lowest income quintile, of whom 90 percent had at most primary
education.

Women who delivered in modern health facilities were more likely to be attended
by a midwife or doctor. Traditional birth attendants delivered nearly a quarter of
all the babies born in 1994, with nearly 45 percent of babies being delivered by
doctors or midwives.

The demand for FP services was found to be highly price-inelastic, meaning that
demand for services does not change significantly in reaction to changes in price.
There is need to clarify that since FP services were at low levels (a situation that
continues), a small increase in fees from this low fee-base translates into a large
percentage increase in fees. Thus, despite the low price elasticity of demand, any
modest absolute increase in service fee could turn a large number of clients from
obtaining the services. However, when the user fee is raised from a high base, a
small price elasticity of demand means that utilization will be affected very little
by the higher fee. This presents a further problem in that clients could be giving
up other essential goods, such as food, in order to access FP services. (A policy
implication of the discussion of price elasticity of demand is that in low-income
countries, a user fee system at government facilities should always be
accompanied by a system of fee-waivers and exemptions for the poor.)

Market segmentation may be promoted in a situation where scarce health
resources have to be delivered to a particular group. In 1994, the age group 15–
39 years was the group most in need of FP/RH services. Some market segments
for FP/RH services may be encouraged to operate in favor of this group.

A rather surprising result was the decline in the probability of women from the
wealthier households using any method of contraceptives when wealth is defined
by such assets as land or cattle. This could be explained by the fact that in a rural
agricultural setting, men tend to have decisionmaking authority for the
household, and women must obtain permission to seek FP services. Men may
view FP/RH services as a low priority, and larger families may be desirable from
a labor perspective. Therefore, there is a need to address the cultural barriers
associated with lack of access to FP services.
Market Segmentation Analysis Using the 2003 DHS Data
POLICY undertook a second market segmentation analysis using 2003 DHS data to
provide more updated information on the performance of the Kenya family planning
program. The results show that:
Kenya Core Package Final Report
12

The performance of the Kenya family planning program, as measured by modern
contraceptive prevalence, is currently stagnant at about 31 percent. Although the
overall use has not changed, there have been significant changes in the
composition of services. Use of injectables has increased over time while use of
oral contraceptives and IUDs has fallen as a share of the method mix.

The difference in contraceptive prevalence between women of higher and lower
socioeconomic status (SES) is substantial. The wealthiest women are well on
their way toward levels of contraceptive prevalence observed in middle income
countries, while the prevalence among low SES women remains low. High SES
family planning users use a wide variety of methods—injectables, pills, IUDs,
and abstinence. In contrast, the majority of low SES family planning users
employ either injectables or abstinence.

Family planning users also differ in their choice of provider across the
socioeconomic groups. FP users of low SES are much more likely to use public
sector services than are the wealthiest women. Interestingly however, 20 percent
of the women from the lowest SES use the commercial sector to obtain FP
services indicating that the commercial sector can have a role in the expansion of
the market among all women. On the other hand, among the wealthiest family
planning users almost 40 percent used the public sector. Given the relatively high
use of family planning among the wealthier women, 50 percent of all public
sector services go to the wealthiest 40 percent of women.

Women who do not intend to use family planning are relatively rural, uneducated
and from low SES groups. As such, they are not particularly attractive to the
commercial sector. Converting them into family planning customers would
require potentially expensive advertising approaches. The public sector, on the
other hand, could focus some of its resources on reaching this hard-to-reach
group with low-literacy rural campaigns. The public sector could also focus
resources on the women from low SES groups who intend to use or are currently
using a traditional method.

Unmet need for FP and intention to use FP are highest among women of very
low SES, indicating a strong need to concentrate efforts on reaching the low SES
groups for the expansion of the FP market. Women from low SES groups in
Kenya need partially or fully subsidized FP services. However, both financial
and human resources are limited. A potential solution is for the public sector to
concentrate its efforts on low SES and hard-to-reach women, while the
commercial and NGO sectors focus efforts on wealthier women who are already
using family planning or are intending to use. Private sector providers, already
strong in Kenya, could offer convenient and affordable services to middle and
high SES clients, focusing their efforts on clients with a willingness and ability to
pay.
Kenya Core Package Final Report
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Dissemination Workshops
The preparation of the above reports enabled POLICY to host dissemination workshops
to inform stakeholders from the national and regional levels and build consensus on
priority actions required. In September 2004, POLICY and the MOH (DRH and DHCF)
hosted a workshop on Financing and Access to FP/RH Services in Kenya to disseminate
and discuss the findings of the research studies and make recommendations to inform the
development and revision of key national FP/RH policies and strategies. The workshop
included discussions on:





Current government RH policy
Impact of user fees on access to services
Preferred methods of targeting resources to reach poor and vulnerable groups
Existing policy gaps
Ways in which the studies would contribute to the development of key FP/RH
policies
Three questions guided the discussions:



What modifications need to be made to the user fee policy to enhance access to
FP and RH services?
What are the most effective methods of targeting resources to reach poor and
vulnerable groups?
What policy gaps need to be addressed by DRH to address the issue of financing
and access?
In this workshop, POLICY examined the significance of
targeting resources in the provision of FP/RH services and
products. Evidence from countries like Benin, Guatemala,
Mali, Nigeria, and Uganda, demonstrated that the
targeting of resources promotes equity by directing
subsidies to those who need them the most, stimulates the
private sector by channeling those who can afford to pay
to the private sector, and eliminates the need for the
commercial and NGO sectors to compete with subsidized
products. Finally, programs can be designed to
specifically address the needs and characteristics of the
target populations, thereby making services more
accessible and user-friendly.
Workshop participants made the following recommendations:
Modifications in user fee policy to enhance access to FP and RH services

The MOH/DRH should set guidelines for the minimum and the maximum fees to
be charged for any method based on provincial socioeconomic and cultural
Kenya Core Package Final Report
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factors, time taken to provide the service, and the cost of the service. The
decisions should be decentralized to the provincial level.

Communities should be sensitized on user fees and waiver systems by posting
waiver policies at service delivery points and through community outreach.

Fees should be continued so that clients will view the service as good, but user
fees should be abolished at primary care facilities and complete waivers should
be available for certain services. Payment in kind should also be allowed. All
vulnerable individuals should be exempted or have the fees waived. The
workshop participants felt strongly that charges should be established through a
consultative process among the MOH, health providers, and the community.
Recommendations should be piloted before widespread implementation.

Supervision and coordination of waivers should be strengthened by setting up
supervisory teams within health management boards to monitor implementation.

There should be thorough analysis of user fee implementation and reinvestment
of revenue; all fees collected should be used in the facility to improve the quality
of services and infrastructure.

Reimbursement for waivers and exemptions should be introduced to facilities in
the envisaged national insurance scheme.

Data recording systems and recordkeeping practices need improvement.
Effective targeting of resources to reach poor and vulnerable groups

It is not easy to define the poor but community leaders can identify them by use
of various criteria (e.g., a person’s inability to feed her/his family). Direct
involvement of the community, as well as information from previous studies, can
help in identification. A rotational committee should control waiver systems at
the institutional level.

Socially acceptable and culturally sensitive criteria should be developed to help
identify the poor. A structured questionnaire can be used to gauge level of need.
Indicators such as poverty levels, employment status, and so forth, can be used.
Single parents and youth should also be given particular scrutiny. The rich should
pay more for services.

Service delivery that meets the special needs of some regions, individuals, or age
groups should be explored. Such need-focused services should pay attention to
geographical characteristics and client possessions, particularly income While
clients can be asked about their income and economic status, self-declaration
may not always work and provider determination often proves unreliable.
Kenya Core Package Final Report
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
Resources should be allocated to the dispensaries used by poor people. Some
needy people can be located at their places of residence.
Policy gaps that need to be addressed by the MOH

Currently, there are no strategies to mobilize resources to fill up the gap left by a
shift in donor funding. There should be a budget line for FP commodities, hence
the need for DRH to lobby for more budgetary allocation. DRH should allow
facilities to reinvest some of their revenue from RH services. Integration of RH
services with other donor-funded projects, for example in HIV/AIDS, can reduce
the problem.

There is a need to formulate policy on user fees and health insurance with a view
to including RH services in the social welfare scheme. There is also a need to
prepare standard operational guidelines for user fees, with minimum and
maximum charges for all services at all levels. Policy on waivers and exemptions
should be streamlined to ensure that only the needy benefit.

Community participation in decisions should be enhanced to create community
ownership of services and address issues of awareness and demand for services.

There is a need for guidelines on how to reach special groups, such as
adolescents and the disabled.

Guidance is needed on how to work closely with donors and the private sector.

The MOH should define the role of community-based distributors with a view to
reintroducing and supporting them.

The MOH should select the most cost-effective set of interventions for safe
motherhood and FP to improve resource allocation.

Policies should enhance decentralization and integration of services, and the
process should not be politicized.
In June 2005, POLICY, jointly with the MOH (DHCF and DRH), facilitated a workshop
for the staff at facilities that participated in the FP access study, medical superintendents
from PGHs and district hospitals, RH coordinators, and the staff of pilot hospitals. The
forum was used to share the findings of the core package research and obtain inputs to be
used in reviewing and finalizing the Draft Guidelines for Pricing FP Services and
Commodities in Public Sector Health Facilities. The stakeholders reiterated the
significance of the exercise, highlighting the potential that exists in raising additional
funds to improve FP access and quality. However, they want to streamline the present
system of waivers and exemptions to cushion the poor and other vulnerable groups
against the adverse effects of the fees.
Kenya Core Package Final Report
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The stakeholders provided recommendations on the focus of the draft guidelines by
highlighting that the issues should be captured in six main areas: organization and
management, costing and pricing, efficiency, quality assurance, equity and access, and
supervision and monitoring. The contents of each component are as follows:

The organization and management component should be situated within the
MOH’s decentralization framework, with a focus on the roles and responsibilities
of the key institutions at all levels. This component should also provide an
organogram that shows the linkages of the various stakeholders.

In the section on costing and pricing, the guidelines should assist hospitals in
identifying the costing units (e.g., registration supplies, paraffin, cotton wool,
commodity fees, laboratory costs) to be used as a basis for pricing and give
indicative prices by level of facility. The process should be based on appropriate
costing and modest mark-ups that will increase utilization of FP services and
encourage effective cost recovery. For sustainability purposes, the stakeholders
reiterated the need to mandate government institutions to set up revolving funds
and lobby for the introduction of a specific budgetary line item to purchase
contraceptives.

Under efficiency, the stakeholders suggested the inclusion of appropriate
procedures for reporting on funds, revenue control, accounting in accordance
with the Exchequer and Auditing Act, banking, expenditures, and commodities
management. This part should also give direction on the appropriate coding for
FP charges, introduction of cash registers where applicable, recording and
registration procedures, and continued training of service providers to enhance
quality.

The quality assurance section should capture issues relating to the technical
specifications for FP commodities, institutions undertaking surveillance and
testing, and development of national standards.

In enhancing equity and access to FP services and commodities, the guidelines
should give direction on streamlining the existing system of waivers and
exemptions by specifying target groups, eligibility criteria, and appropriate
administration procedures. The stakeholders further identified the groups to be
considered in the targeting of resources. These include sexually active students
aged 12–21, school dropouts, street families, the poor, the mentally and severely
physically challenged, recruits in the armed forces, teenage parents, the widowed,
and rape cases that needed emergency contraception and post-exposure
prophylaxis. To effectively administer the waivers and exemptions, daily,
weekly, and monthly reports on the waivers granted should be forwarded to the
relevant department or authorities for further scrutiny.

The supervision and monitoring component was recommended for inclusion in
the guidelines to assist in monitoring the impacts of the user fees on such key
indices as revenue collection, waivers and exemptions, workload, expenditures,
quality of services, fee structures, commodity supply, and utilization of services.
Kenya Core Package Final Report
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A further revision of the draft guidelines for pricing was undertaken after June 2005
based on the workshop recommendations. The revised version was submitted to DRH for
consideration before forwarding to DHCF for final endorsement on behalf of the
government. On endorsement, the guidelines will be critical in informing the
amendments to be made by the DRH on user charges for family planning by facility type
and revisions to be made by the DHCF on MOH cost-sharing manuals to improve
systems and procedures.
Moreover, there is potential under POLICY’s follow-on project to support the
implementation of the new FP fee structure and systems of waivers and exemptions, as
suggested in the guidelines, on a pilot basis. The impacts on utilization thereafter will be
analyzed and disseminated before recommending large-scale implementation.
Kenya Core Package Final Report
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V.
Conclusion
The activities under this POLICY core package revealed several important lessons related
to user fees that will have a lasting impact on planning and financing of FP services in
Kenya.
Lessons Learned for Kenya
User fees for FP services and commodities are unavoidable in the current
macroeconomic situation. Cost sharing was started in Kenya to enable public health
facilities to supplement the government’s efforts to finance healthcare. As a result,
facilities were able to employ supplementary staff, purchase drugs not provided by the
MOH and non-pharmaceutical supplies, hire transport for emergency referrals, and
provide essential laboratory tests. On inauguration of the new government, however,
there were attempts to abolish cost sharing, with the Minister of Health setting a new
policy based on a low fixed payment base for attendance at government health centers
and dispensaries. This move has the potential of eliminating community contributions
and seriously affecting access and quality of services in public health facilities. The
policy has been erroneously equated to free services, and the initial reaction to the
directive was a sudden upsurge of client load, mainly minor curative services, that
overwhelmed the few staff at the facilities. The result has been that preventive FP/RH
services have tended to be given lower priority. This policy change is having a serious
detrimental effect on quality of services and staff and client morale, since the facilities
are now lacking the funds to hire additional staff and purchase essential commodities and
supplies. The lesson learned here is that in the absence of additional funding from the
exchequer, cost-sharing is essential, and communities would be willing to pay affordable
fees for better quality services, as they were in the past.
There is a wide divergence between the actual fees being charged by facilities and
MOH price guidelines, prompting the need to review and harmonize the various
guidelines. The task of fee setting for FP services and commodities hardly ever follows
the guidelines stipulated by the MOH. In turn, there has evolved an arbitrary and
uncoordinated fee structure that has adversely affected the efficient functioning of the
referral system. Worse, the fees have not been based on any justifications related to
costing or modest mark-ups. This finding prompts the need for a review of the pricing
procedures in an attempt toward harmonization and introduction of a graduated fee
structure along the health system, with relatively higher fees at the upper levels to enable
the functioning of an efficient referral structure. There is a need to discourage the use of
informal fees by displaying fee posters in waiting areas, using suggestion boxes for
clients to report violations, and using name tags to identify the authentic staff.
Policy research provides vital information for decisionmaking, service planning, and
management and should be supported. The information produced under the core
packages, “Improving Access to FP Services in Public Sector Facilities for
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Poor/Underserved Populations in Kenya” and “Maternal User Fee Study,” and the
complementary field support initiative, “Unit Costing for Safe Motherhood Interventions
in the Public Sector,” have produced much needed data on the unit costs of FP services,
which have been used by the MOH to improve planning and service management even in
areas outside RH care. The MOH/DRH now has information that it can use to estimate
the costs, overall FP resource requirements, and the financing gap; examine the effects of
different FP service provision levels on overall resource requirements; and mobilize
additional government, donor, and private sector resources to support the implementation
of FP activities as provided in the NHSSP II and National Reproductive Health Policy.
The information produced by the core package initiative facilitated the government’s
change of position on cost sharing. The government had been eager to abolish cost
sharing for health services and commodities. To this end, the Minister of Health had been
making public pronouncements against cost sharing as part of a commitment to satisfy a
pre-election pledge. With the costing information provided by the core package initiative
to the MOH, however, the government has since changed its position and realized that the
magnitude of resources required to provide free medical services to the entire population
is beyond the reach of government alone. Presently, the government has settled on using
the existing cost-sharing system to gradually introduce a national social health insurance
scheme.
Unlike in the past, managers in public hospitals are now keen on costing and pricing. For
a long time, user fees in the public health facilities have been set arbitrarily, leading to
overcharging and/or undercharging. This has adversely affected access to FP services and
commodities, particularly for the poor and underserved segments of the population. In
realizing that the various hospitals have for long worked independently without sharing
information on costs and prices, POLICY moved promptly under the core package
initiative to bring the groups together to share this type information by category of
facility. For example, New Nyanza General Hospital realized that its charges were more
than five times higher than those of other PGHs. In follow-up, the hospital’s medical
superintendent took unprecedented actions to decrease charges, which has led to
increased utilization of FP services and commodities.
The draft user fee guidelines will enable the government to enact an effective, evidencebased approach to implementing user fees, waivers, and exemptions for FP services in
Kenya. The development of clear, transparent, and equitable guidelines will provide the
poor and other vulnerable groups with much better access to quality FP services while at
the same time protecting them against the adverse impacts of cost sharing for FP and
other health services. Through the development of a more responsive pro-poor fee
structure, the poor and vulnerable will also have improved access to FP services at higher
levels of the health care system, which will improve the efficiency and effectiveness of
the FP/RH referral system.
Kenya Core Package Final Report
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Lessons Learned Applicable to Other Countries
Several of the findings and lessons learned from the Kenyan core package activities are
applicable to other countries.
Process Lessons


It is important to take into consideration the modality of providing technical
assistance to the Ministry of Health and related government departments in the
area of FP/RH. The Director of Medical Services (DMS/MOH) and the Minister
must be informed from the very beginning. Effective links and involvement also
need to be established with healthcare financing and healthcare reform units, and
with key MOH officers including departmental heads to discuss the objectives of
activities and obtain their support. This should be followed by the establishment
of appropriate logistical support and regular effective communication lines
between the MOH and POLICY, with the feedback frequently given to the
USAID country office.
Workshops are useful venues for building consensus with stakeholders.
Research Findings of General Interest





FP commodities may be free of charge, but user fees are needed to enable
facilities to deliver the commodities to clients. Without these nominal charges,
huge quantities of FP commodities supplied by donors would actually not be
used and would go to waste.
Despite low price elasticities of demand, fee exemption and waivers are needed
for the poor, because the elasticities are at low price levels and any modest
increase in user fees amount to large percentage fee increases, which discourage
utilization by the poor. The poor may also give up other essential items to use
FP/RH services. Indeed, these two aspects have discouraged enthusiasm for user
fees in low-income countries in general. There has been some success in Kenya
by establishing facility-based committees to exempt the poor from user fees.
There are several large market segments for FP services. Wealthy women tend to
use FP services from the private sector, with the poor patronizing public health
facilities to meet their FP needs. This provides an opportunity to serve the poor
through the public sector, by providing high-quality services for which the poor
pay through waiting time. (However, a large proportion of high-income women
use the public sector for certain FP services, so subsidies intended for the poor
would also be used by others.)
The pattern of FP usage can change over time. The change may be induced by
change in method preference or by modalities used to deliver commodities and
services. Long-run planning for supply of FP commodities should take these
demand changes into account.
The market segmentation studies show that the poor are at risk of receiving lowquality FP services. A promising way to deal with this equity problem is to
improve service quality and access at peripheral government health facilities
Kenya Core Package Final Report
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
using revenue from general taxation. In countries where government revenue is
insufficient for this purpose, donors can provide general budget support under
condition that a verifiable portion be spent at peripheral units to provide FP/RH
services.
Findings from cost studies show that policy on FP/RH can be considerably
improved by generating information on costs of various services. Indeed,
effective planning and monitoring for these services cannot be done without this
cost data. Availability of this information in the MOH in Kenya improved the
ministry’s confidence in negotiating with donors and the Treasury about its own
budget.
Local Research Capacity

The implementation of the Kenyan core package demonstrated the value of
locally available researchers as well as the collaboration between local
researchers and international consultants. The costing study was an excellent
model of how an international consultant can provide technical assistance to local
consultants, leading to completion of a timely, high-quality research report.
Neither the international consultant nor the local researchers could have produced
such a document alone.
Political Environment

Frequent changes in senior staff at the MOH meant that some of the policies
designed or clarified with the technical support from the core package could not
be implemented. There were also policy implementation barriers of an
institutional type, e.g., legislation that needed to be changed before some policies
could be implemented.
Policy Implementation

What to do to get good policies implemented? Unless good policies are
implemented, they will have no impact on people’s lives. This is the next
challenge for POLICY as it moves on into the follow-on project, PDI.
Kenya Core Package Final Report
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