Financing rural health services in Kenya

The paper analyzes household expenditure on medical care and the willingness to contribute towards service improvements at government health facilities. The analysis is based on survey data from two rural districts in Kenya situated approximately four hundred miles apart. The main finding is that medical care expenditure rises as household income increases, but the probability of willingness to pay fees for service improvement at government clinics declines with income. Income is an important determinant of the willingness to participate in a hypothetical government insurance scheme, with the probability of participation falling as income rises. These results should be interpreted with caution because of the potential for incorrect reporting of the willingness to pay for services that have an element of a social good. The policy implications of the results are briefly discussed.