Catastrophic health expenditure (CHE) is frequently used as an indicator of financial protection. CHE exists when health expenditure exceeds a certain threshold of household consumption. Although CHE is reported to have declined in Kenya, it is still unacceptably high and disproportionately affects the poor. This study examines the socioeconomic factors that contribute to inequalities in CHE as well as the change in these inequalities over time in Kenya.
We used data from the Kenya household health expenditure and utilisation (KHHEUS) surveys in 2007 and 2013. The concertation index was used to measure the socioeconomic inequalities in CHE. Using the Wagstaff (2003) approach, we decomposed the concentration index of CHE to assess the relative contribution of its determinants. We applied Oaxaca-type decomposition to assess the change in CHE inequalities over time and the factors that explain it.
The findings show that while there was a decline in the incidence of CHE, inequalities in CHE increased from -0.271 to -0.376 and was disproportionately concentrated amongst the less well-off. Higher wealth quintiles and employed household heads positively contributed to the inequalities in CHE, suggesting that they disadvantaged the poor. The rise in CHE inequalities overtime was explained mainly by the changes in the elasticities of the household wealth status.
Inequalities in CHE are persistent in Kenya and are largely driven by the socioeconomic status of the households. This implies that the existing financial risk protection mechanisms have not been sufficient in cushioning the most vulnerable from the financial burden of healthcare payments. Understanding the factors that sustain inequalities in CHE is, therefore, paramount in shaping pro-poor interventions that not only protect the poor from financial hardship but also reduce overall socioeconomic inequalities. This underscores the fundamental need for a multi-sectoral approach to broadly address existing socioeconomic inequalities.