Examining the influence of budget execution processes on the efficiency of county health systems in Kenya

Public financial management (PFM) processes are a driver of health system efficiency. PFM happens within the budget cycle which entails budget formulation, execution and accountability. At the budget execution phase, budgets are implemented by spending as planned to generate a desired output or outcome. Understanding how the budget execution processes influence the use of inputs and the outcomes that result is important for maximizing efficiency. This study sought to explain how the budget execution processes influence the efficiency of health systems, an area that is understudied, using a case study of county health systems in Kenya. We conducted a concurrent mixed methods case study using counties classified as relatively efficient (n = 2) and relatively inefficient (n = 2). We developed a conceptual framework from a literature review to guide the development of tools and analysis. We collected qualitative data through document reviews and in-depth interviews (n = 70) with actors from health and finance sectors at the national and county level. We collected quantitative data from secondary sources, including budgets and budget reports. We analysed qualitative data using the thematic approach and carried out descriptive analyses on quantitative data. The budget execution processes within counties in Kenya were characterized by poor budget credibility, cash disbursement delays, limited provider autonomy and poor procurement practices. These challenges were linked to an inappropriate input mix that compromised the capacity of county health systems to deliver health-care services, misalignment between county health needs and the use of resources, reduced staff motivation and productivity, procurement inefficiencies and reduced county accountability for finances and performance. The efficiency of county health systems in Kenya can be enhanced by improving budget credibility, cash disbursement processes, procurement processes and provider autonomy.