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Subsidy and It Implication in Public Health Authors Prof. Mohamed Karama-KEMRI Mr. Simon Kimani- KMTC Ms. Viola Jepkosgey - KMTC Mr. Francis Kariuki- KMTC.

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Presentation on theme: "Subsidy and It Implication in Public Health Authors Prof. Mohamed Karama-KEMRI Mr. Simon Kimani- KMTC Ms. Viola Jepkosgey - KMTC Mr. Francis Kariuki- KMTC."— Presentation transcript:

1 Subsidy and It Implication in Public Health Authors Prof. Mohamed Karama-KEMRI Mr. Simon Kimani- KMTC Ms. Viola Jepkosgey - KMTC Mr. Francis Kariuki- KMTC Ms. Hellen Gitau- JKUAT Mrs. Annette Mwangi-KEMRI Erick Machuki-MoH –Kajiado Mika Mitoko- PATH

2 Introduction  Subsidy is a form of financial assistance paid to an individual, a business or an economic sector in order to achieve certain public objective.  Any monetary exchange which is not directly connected to paying for a service can be termed as a subsidy. Examples of subsidies  Direct subsidy: directly giving money to people.e.g. money given to total sanitation campaign to support people build latrines in order to achieve open defecation free status.  Services or indirect transfer: these are services provided by public sector or indirect financial transfer. E.g. Construction of community toilets to reduce open defecation or distribution of insecticides mosquito nets to reduce malaria incidence.

3 Historical Perspective on Subsidy  After independence, developing countries received donations in kind. In health these included subsidized health equipment mainly for diagnosis and management of illnesses.  It was familiar to find these equipments broken due to lack of skills to operate and maintain. It was also expensive to maintain as the equipment was from different manufacturers and replacements parts were difficult to procure.  Villagers were also provided with e.g. latrine. These were often not used due to lack of ownership

4 Subsidy In Relation To Primary Health Care  Primary health care is the essential care based on practical, scientifically sound and socially acceptable methods and technology, made universally accessible to individuals and families in the community through their full participation and at a cost that the community and country can afford to maintain at every stage of their development in the spirit of self reliance and self determination  Access to primary health care has been limited, particularly in rural areas. Quality of these services has also been inconsistent and generally poor.  Kenyan Government devotes significant proportion of its resources in investing in human capital both in education and health-care sector.

5 Subsidy consideration  It has been estimated that up to 63% of child mortality could be averted through targeted coverage of inexpensive health products such as iron fortification, point of use water treatment and insecticide-treated bed nets, however there is limited access to this services even at low prices among poor.  Thus, free or highly subsidized distribution on basic package of child, maternal, reproductive health and HIV/AIDS services is often advocated as a necessary strategy for rapidly increasing coverage and reducing morbidity and mortality.  Subsidizing this services ensures that primary health care services are accessed by all hence promoting healthcare equity and universal coverage. However, for this to be sustainable, community must be engaged from the beginning so that there is sustainability.

6 Malaria and Subsidy  Malaria is one of the world’s foremost public health concerns, killing close to 1 million people every year.  The global fight against malaria has been continually challenged by poor access to affordable and effective medicine, unreliable public health facility supply and limited availability in the private sector.  In Kenya, ACTs are now the only effective class of anti- malarial drugs which are un affordable to the poor. Lowering the cost of treated bed nets and anti-malarial drugs below their current market by means of subsidy addresses the issue of risk and equity.

7 Subsidy and Social Capital  Social Capital is the expected collective or economic benefits from the preferential treatment and cooperation between individual and groups. These pattern of social interrelationships enables people to coordinate actions and achieve desired goals.  In health, social capital is experienced at individual and community levels where solidarity and norms make people willing to participate in various social activities which can positively influence health. For example construction of toilets through community led total sanitation (CLTS)

8 Cont.  Achieving universal health coverage in Kenya still remains a challenge that requires attention due to poverty and overstretched health system. Due to these challenges, the Government provides subsidy to allow equity and access to health care services.  However, subsidy disrupts social capital and creates over dependence by the community, this limits the community from solving their own problems.  Subsidies aimed at helping the poorest sometimes associate a certain technology with poverty and the need for assistance further distorting demand which can influence negatively to the access of healthcare services

9 Subsidy on Sanitation Hardware  Community Led Total Sanitation, or CLTS, is an approach which facilitates a process of empowering local communities to stop open defecation and to build and use latrines without the support of any external hardware subsidy  Hardware subsidy provides funds to cover the cost of constructing latrines in poor households which distorts if not undermines directly the most important drivers of change in sanitation behavior, namely community wide social pressures that revolves around shame, embarrassment and pride.  CLTS measures its success on the basis of the use of the latrines constructed, and more importantly, on the complete end to open defecation.

10 Subsidy and Sustainability  Donor projects are short lived and have no post project periods. Its therefore of prime importance to facilitate the integration and participation of the local beneficiaries and to develop a sense of ownership towards the program. For example sanitation infrastructure.  The sustainability of the water and sanitation infrastructure which is constructed through subsidies can only be ensured if local community has a sense of ownership towards these new facilities which comes along with great acceptance and willingness to operate and maintain this newly constructed infrastructure.  One of the main problems with subsidies appears to be that the different objectives of any public subsidy remain non-explicit.

11 Advantages and disadvantages Advantages If well targeted, can have very positive effect Addresses access problems directly and may be better targeted Uses existing tariff collection and payment system Disadvantages Lack of financial sustainability, if there are not sufficient public funds to support it Subsidies may not increase access to poor households Subsidies often create expectations that cannot be fulfilled in surrounding and suppress demand

12 Cont The use of subsidies for construction of “standard” facilities distorts the market and suppresses innovations that might bring down costs Subsidies aimed at helping the poorest sometimes associate a certain technology with poverty Requesting a down payment or contribution to assess demand before a subsidy is released may exclude the poorest households Subsidies may distort markets, and can impose large economic costs

13 Conclusion  At the local level subsidy erodes self determination and weaken the social capital and collective response. However subsidy should be allowed in a limited way where it influences positive change, reduces morbidity and mortality.  At international level, subsidy in form of equipment and technologies must be packaged with capacity development for local operation and maintenance which will ensure sustainable use.

14 Recommendation Policies should be developed to guide areas in health where subsidy could be applied


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