NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, April 25, 2018

By Melvin Obadha, Andrew Seal, Tim Colbourn

With access to healthcare remaining a major problem in Sub-Saharan Africa because of costs, the continent could benefit from using services such as mobile money and savings.

Evidence from Kenya

In Kenya, only 40 per cent of the population seek services from primary level public health facilities where it’s free. Instead per cent of the population opt to go to private or higher levels of public healthcare where they must pay.

This is because primary-level public facilities tend to lack equipment, staff, medicine and good quality of care. Furthermore, health insurance coverage is low as 82 per cent of women and 79 per cent of men do not have it.

Households are forced to make out-of-pocket payments to cater for the direct and indirect costs of healthcare such as consultation, medicines, diagnostic tests, hospitalisation costs, transportation to a health facility, time off work of the ill family member and associated loss of income. In coping with the costs of healthcare, households will first use available income and savings.

Then they resort to borrowing from informal and formal financial institutions, rely on remittances from family and friends (social networks), cut back on non-health expenses such as food and education, delay investment, shift labour tasks between family members and hire external labour to cater for the ill family member.

Photo courtesy of Rob Tinworth.