Setting healthcare priorities

Setting healthcare priorities: a description and

evaluation of the budgeting and planning

process in county hospitals in Kenya

Edwine W. Barasa,1,2 Susan Cleary,2 Sassy Molyneux,1,3 and

Mike English1,4

1KEMRI Centre for Geographic Medicine Research – Coast, and Wellcome Trust Research Programme, Nairobi,

Kenya, 2Health Economics Unit, University of Cape Town, Cape Town South Africa, 3Centre for Tropical Medicine,

University of Oxford, Oxford, UK and 4Nuffield Department of Medicine, University of Oxford, Oxford, UK

*Corresponding author. KEMRI Centre for Geographic Medicine Research – Coast, and Wellcome Trust Research

Programme, P.O Box 43,640-00200, Nairobi, Kenya. E-mail: edwinebarasa@gmail.com

Accepted on 1 September 2016

Abstract

This paper describes and evaluates the budgeting and planning processes in public hospitals in

Kenya. We used a qualitative case study approach to examine these processes in two hospitals in

Kenya. We collected data by in-depth interviews of national level policy makers, hospital man-

agers, and frontline practitioners in the case study hospitals (n¼ 72), a review of documents, and non-participant observations within the hospitals over a 7 month period. We applied an evaluative

framework that considers both consequentialist and proceduralist conditions as important to the

quality of priority-setting processes. The budgeting and planning process in the case study hos-

pitals was characterized by lack of alignment, inadequate role clarity and the use of informal

priority-setting criteria. With regard to consequentialist conditions, the hospitals incorporated

economic criteria by considering the affordability of alternatives, but rarely considered the equity

of allocative decisions. In the first hospital, stakeholders were aware of – and somewhat satisfied

with – the budgeting and planning process, while in the second hospital they were not. Decision

making in both hospitals did not result in reallocation of resources. With regard to proceduralist

conditions, the budgeting and planning process in the first hospital was more inclusive and trans-

parent, with the stakeholders more empowered compared to the second hospital. In both hospitals,

decisions were not based on evidence, implementation of decisions was poor and the community

was not included. There were no mechanisms for appeals or to ensure that the proceduralist condi-

tions were met in both hospitals. Public hospitals in Kenya could improve their budgeting and

planning processes by harmonizing these processes, improving role clarity, using explicit priority-

setting criteria, and by incorporating both consequentialist (efficiency, equity, stakeholder satisfac-

tion and understanding, shifted priorities, implementation of decisions), and proceduralist

(stakeholder engagement and empowerment, transparency, use of evidence, revisions, enforce-

ment, and incorporating community values) conditions.

Key words: Budgeting and planning, deliberative democracy, hospitals, Kenya, priority-setting

VC The Author 2016. Published by Oxford University Press in association with The London School of Hygiene and Tropical Medicine.

This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unre-

stricted reuse, distribution, and reproduction in any medium, provided the original work is properly cited. 329

Health Policy and Planning, 32, 2017, 329–337

doi: 10.1093/heapol/czw132

Advance Access Publication Date: 26 September 2016

Original Article

D ow

nloaded from https://academ

ic.oup.com /heapol/article/32/3/329/2555448 by W

alden U niversity user on 25 January 2021

Introduction

Hospitals consume a significant proportion (50–60%) of recurrent

national health budgets and are avenues for the delivery of key inter-

ventions (English et al. 2006). Understanding how these hospitals

set their priorities and the factors that influence their allocation of

resources is therefore imperative (Martin et al. 2003). However,

priority-setting research has mainly focused on macro (national) and

micro (patient) level processes and rarely on the meso (regional and/

or organizational) level, particularly hospitals (Martin et al. 2003).

Further, of the few studies examining the hospital level priority-

setting, the majority have been carried out in high income countries

(Barasa et al. 2015b). There is therefore a dearth of literature on

hospital level priority-setting practices in LMICs. This is consistent

with a general lack of evidence on priority setting frameworks and

their usefulness in LMICs (Wiseman et al. 2016).

This paper focuses on priority-setting practices in public hos-

pitals in Kenya. In 2013, after a national election that ushered in a

new government, the country transitioned into a devolved system of

government with a central government and 47 semi-autonomous

units called counties (Government of Kenya 2010). Under this new

governance structure, the public healthcare delivery system is organ-

ized into four tiers, namely the community level, primary care level,

county referral hospitals and national referral hospitals (Ministry of

Health 2011). County referral hospitals, which are the focus of this

study, are first level referral hospitals in the county health systems.

Little is known about how the Kenyan health sector sets its prior-

ities. At the macro level, it has been reported that priority setting is

ad hoc, rather than systematic, without explicit priority setting crite-

ria (Ndavi et al. 2009). The sector is guided by a long term (15

years) national health policy which outlines health sector objectives,

and a short term (5 years) national health sector strategic plan which

articulates sector strategies aimed at achieving the policies laid out

in the national health policy. The health sector strategy outlines a

package of health services that are to be provided by the public sec-

tor, known as the Kenya essential package of health (KEPH)

(Ministry of Health 2005). Hospitals were therefore expected to

provide KEPH services, but had the authority to prioritize across

these services. On paper, the Ministry of Health employed a com-

bination of top-down and bottom up planning to operationalize the

sector strategy (Ndavi et al. 2009). There are no official guidelines

in place on how the priority setting should be conducted at the

county hospital level. There is also no evidence/literature on how the

priority setting process is actually carried out within hospitals in

Kenya. We used a case study approach to examine priority-setting

practices in two of these hospitals. Specifically, this paper presents a

description and evaluation of the budgeting and planning process in

the case study hospitals. The budgeting and planning process was se-

lected because it is, in theory, the major expression of identified and

selected hospital priority activities and services, with allocation of

available resources against those activities.

Methods

This study employed a qualitative case study design. A case study

has been defined by Yin (2003) as an empirical inquiry that investi-

gates a contemporary phenomenon within its real life context. A

case study approach is considered suitable to inquiries into phenom-

ena that are highly contextual and where the boundaries between

what is being studied and the context are blurred (Yin 2003). It has

been observed by several authors that priority setting practices in

hospitals are highly context dependent (Kapiriri and Martin 2010;

Martin and Singer 2003; Gibson et al. 2004). The case study ap-

proach is useful in building an understanding of the contextual influ-

ences on the phenomena of interest (Yin 2003; de Lange and

Flyvbjerg 2011). The case study approach is also considered appro-

priate for the study of complex social phenomena (Yin 2003; de

Lange and Flyvbjerg 2011). Priority setting is considered a complex

social process that confronts decision makers with significant theor-

etical, political, and practical obstacles (Hauck et al. 2004; Shayo

et al. 2013; Klein 1998). As observed by Flyvbjerg (2001), social

processes are complex and unlikely to yield universal truths or ac-

curate predictions. An appropriate analysis should therefore aim to

develop concrete, context dependent knowledge (Flyvbjerg 2001).

These context specific insights could then be tested and examined in

other contexts in an iterative process of knowledge building.

Two county hospitals were purposely selected as cases for the

study. The two hospital cases were selected purposefully guided by

the following criteria: (1) First level referral hospitals that were des-

ignated as county hospitals; (2) hospitals with a high local resource

level and those with a low local resource level. This was based on an

assumption that priority-setting practices might be influenced by the

level of funding. In the financial year preceding data collection, one

of the case study hospitals had an annual budget of USD 528 862,

while the other had an annual budget of USD 384 472. These budg-

ets remained fairly stable over the past 5 years. In line with case

study methodology, the selection of hospital cases aimed to ensure

depth in information, as opposed to aiming for representativeness of

all county hospitals in Kenya. To maintain confidentiality and min-

imize the potential identification and possible victimization of study

participants, the hospitals selected for the study will only be identi-

fied as Hospital A and B. Data were collected through a combin-

ation of in-depth interviews with hospital managers and frontline

workers, a review of relevant documents including hospital plans,

budgets, minutes of meetings, and non-participant observations for

a total period of 7 months in both hospitals. The selection of partici-

pants for interviews was purposive with the aim of selecting those

Key messages

• Alignment of budgeting and planning practices, clarity of composition and roles of decision-making structures, and the

use of explicit and formal decision-making criteria could improve hospital level priority setting. • Hospital priority-setting practices could be improved by incorporating both efficiency and equity in decision making, and

yielding the following intermediate outcomes; stakeholder satisfaction and understanding, shifted priorities, implementa

tion of decisions. • Incorporating the following deliberative democratic principles; stakeholder engagement and empowerment, transpar

ency, use of evidence, revisions, enforcement, and incorporating community values, could also improve hospital level

priority-setting practices.

330 Health Policy and Planning, 2017, Vol. 32, No. 3

D ow

nloaded from https://academ

ic.oup.com /heapol/article/32/3/329/2555448 by W

alden U niversity user on 25 January 2021

who had an in-depth knowledge and experience of the budgeting

and planning process. This included senior managers, middle level

hospital managers, frontline practitioners and key informants within

the planning departments of the central Ministry of Health. In total,

72 participants were interviewed; 35 from Hospital A, 32 from

Hospital B and 5 from the central Ministry of Health (Table 1).

This study was broadly guided by the approach proposed by

Martin and Singer (2003) on improving priority-setting in health-

care organizations. This approach proposes that efforts to improve

priority-setting in healthcare organizations should entail (Martin

and Singer 2003): (1) critical description of priority-setting processes

using case study methods; (2) evaluation of priority-setting using an

ethical framework and (3) action research to improve priority-

setting based on the findings in the first two steps. While this paper

focuses on step one and two, it is part of a wider action learning

study to improve governance and accountability in the county health

systems in which the case study hospitals are located.

To evaluate the budgeting and planning process in the case hos-

pitals we applied a published evaluative framework that was de-

veloped from a review of literature on priority-setting evaluation

(Barasa et al. 2015a). Our evaluative framework is based on the ar-

gument that both consequentialist and proceduralist conditions are

important for successful priority-setting (Barasa et al. 2015a). The

framework brings together these two perspectives by drawing on

ethical and deliberative democratic frameworks such as the well-

known ‘accountability for reasonableness’ framework (AFR)

(Daniels 2008), as well as consequentialist conditions of priority-

setting (Barasa et al. 2015a). This integrated evaluative framework

makes the following proposals (Figure 1) : First, given that priority-

setting is necessitated by the scarcity of resources, priority-setting

processes should incorporate efficiency considerations by seeking to

maximize outcomes within the constraint of available resources.

Second, the goal of maximizing desired outcomes should be traded-

off against equity. To achieve equity, the distribution of resources

should be determined by need rather than other factors such as abil-

ity to pay, favouritism or political consideration. Third, other inter-

mediate outcomes of priority-setting processes are also important.

These include: (1) Stakeholder satisfaction; (2) Stakeholder under-

standing; (3) Shifted (reallocation of) resources and (4)

Implementation. Fourth, the following proceduralist conditions

should be incorporated in priority-setting practices: (1) stakeholder

involvement; (2) empowerment; (3) transparency; (4) revisions; (5)

use of evidence; (6) enforcement and (7) incorporation of commu-

nity values.

Data analysis Transcribed data were imported into NVIVO 10 for coding and

analyzed using a modified framework approach (Pope et al. 2000).

This approach was adopted because it is suited to providing findings

and interpretations that are relevant to policy and pragmatic recom-

mendations. The approach included an initial open coding step to

support the emergence of important themes, which might not have

been captured in the evaluative framework described above.

Ethical considerations The authors received ethical approval from their organization.

Findings Description of the budgeting and planning processes

Hospital decision-making structure. The case study hospitals did not

have an official organogram. However, observations and discussions

with hospital managers and staff identified the existence of a man-

agement structure which was highly hierarchical (Figure 2). At the

lowest level were frontline healthcare workers (such as pharmacists,

medical doctors, and nurses) and non-health staff (such as account-

ants and maintenance personnel), all of whom were answerable to

the heads of their respective departments. These heads of depart-

ments were middle level managers for clinical departments (e.g.

paediatrics, obstetrics and gynaecology), wards (e.g. adult male,

adult female and paediatrics), non-clinical departments (e.g. phar-

macy and laboratory) and support departments (e.g. accounts and

maintenance) who were themselves answerable to the three senior

hospital managers namely the medical superintendent, the hospital

administrator and the hospital nursing officer in-charge. The med-

ical superintendent was the chief executive of the hospital and was

responsible for the overall running of the hospital. The hospital

nursing officer in-charge was in charge of the nursing department

and hence all nursing wards in charges. The hospital administrative

officer was in charge of all the hospital non-clinical departments.

The case study hospitals had 3 management and decision-making

committees. First, there was a hospital management team (HMT),

comprised of all hospital departmental managers (middle level man-

agers) and senior managers. Second, there was an executive expend-

iture committee (EEC), comprised of only the senior managers, and

third, there was the hospital management committee (HMC) which

was an oversight committee that drew its membership from the local

resident community. The hospital was represented in the HMC by

the medical superintendent, who was also its secretary, and the hos-

pital administrative officer.

Budgeting and planning process. The budgeting and planning pro-

cess was comprised of two distinct activities; quarterly budgeting

and the annual work planning (AWP) process. The development of

the hospital budget and the AWP were designed to be linked and

aligned. At the beginning of each government fiscal year (July 1),

hospitals were required to develop and submit AWPs to the central

Ministry of Health (MOH) for approval. Hospitals were then

required to develop quarterly budgets that outlined the allocation of

available resources to the priorities indicated in the AWPs. Hospital

AWPs were developed by the HMT and submitted to the regional

office for onward transmission to the central Ministry of Health

(MOH) for approval. While the range of services provided by hos-

pitals was guided by KEPH, hospital managers had autonomy to al-

locate available resources across service areas (i.e. prioritize across

these services). The budgeting process should begin at the hospital

department level, where departmental managers develop a list of de-

partmental needs and present these to the HMT. The HMT then de-

liberates on the departmental needs and develop budgets that

allocate available cash budgets across hospital departments. These

budgets should then be deliberated upon and finalized by the EEC

Table 1. Number of participants selected in each hospital under

each category

National-level key informants 5

Hospital A Hospital B

Senior managers 6 6

Mid-level managers 22 19

Front-line practitioners 7 8

Hospital sub-total 35 32

Study total 72

Health Policy and Planning, 2017, Vol. 32, No. 3 331

D ow

nloaded from https://academ

ic.oup.com /heapol/article/32/3/329/2555448 by W

alden U niversity user on 25 January 2021