Working in Health: Financing and Managing the Public Sector Health Workforce

1. Working in Health:Financing and Managing the Public Sector Health Workforce Chapter 2 – Background Country Study for Kenya Marko Vujicic, KelechiOhiri, Susan Sparkes with Tim Martineau The World Bank, Washington, DC

2. Outline • Country macroeconomic and fiscal context • Impact of government wage bill policy on the health workforce • Wage bill budgeting process • Budget for overall wage bill • Budget for health sector wage bill • Impact on staffing • Human resource management policies and practices in the health sector • Creating funded posts • Recruiting health workers • Tenure (types of contracts) • Paying health workers • Promotions • Key Messages

3. Macroeconomic and Fiscal Context “Kenya urgently needs to hire 10,000 additional professionals in the public health sector. We have to put our foot down and employ.” - EnockKibunguchy, assistant ministry for health, commenting on Kenya’s health workforce crisis Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

4. Impact of Government Wage Bill Policy on the Health Workforce

5. Wage bill budgeting process Ministry of Finance (MoF) prepares a Budget Outlook Paper, which sets expenditure projections and provides sector ceilings for each ministry. Ministry of Health (MoH) prepares a budget based upon these ceilings, which includes a line items for the wage bill. In recent years, ministries have been instructed to keep wage bill constant. MoH prepares a public expenditure review to summarize previous year’s budget performance (eg. wage bill execution data) and to demonstrate resources needed to implement health sector strategy. The current MoH strategy does not include strategic, costed HRH plans. MoF revises sector expenditure ceilings based on PERs and releases budget strategy paper (BSP). In 2008, BSP indicates the aim to cut the wage bill, but keeps health personnel recruitment a priority. Public hearings are held to debate the budget. MoH prepares budget based on expenditure ceilings from BSP. The Ministry of Finance consolidates budgets and Cabinet approves overall budget. A secondary process allows for supplemental funds to be allocated to ministries. Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

6. Budget for overall wage bill • 2000: Budget and wage bill ceilings introduced as part of public sector reform program. MTEF approach adopted to rationalize public expenditure and to improve the macroeconomic environment. • 2003 – 2006: IMF includes a wage bill ceiling as part of PRGF lending conditionality. • 2005 – 2008: The Government makes concerted efforts to reduce the overall wage bill. MTEF guidelines instruct line ministries to base the wage bill budget on current authorized establishment and any new recruitment allowed only after Treasury confirms the availability of funding. Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

7. Budget for health sector wage bill • Government policy explicitly excludes health workers from hiring freeze: “Wage policy measures will include . . . flexibility to allow for recruitment of medical personnel in order to aim at reaching the optimum level of personnel for the health sector and to move toward achieving the MDGs. (Kenya Ministry of Finance 2007b: 23)” • 2001 – 2007: Health sector accounting for increasing share of overall government wage bill Clear prioritization of health within overall wage bill. Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

8. Budget for health sector wage bill Health Spending • 2000 – 2004: Health spending as share of government spending fell significantly, despite per capita increases in government health expenditure. • 2005 – 2009: Overall increasing importance of health in overall government expenditure. Wages as % of Health Spending • 2000 – 2004: Health wage bill as share of health expenditure increased from 48% to 52%. • 2004 – 2008: Health wage bill to remain a constant share of health expenditure. • Constant projections reveal lack of strategic planning in budgeting the wage bill. Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

9. Impact on staffing Hiring Trends • Despite prioritizing health within overall wage bill, hiring remained quite flat. • 2006: Large increases resulting from donor-supported Emergency Hiring Program (EHP). • High health worker unemployment persists. • In 2006 of the 4,466 qualified applicants 2,064 were unemployed. 71% were under 30. • In 2006, 385 medical interns graduated but budget was provided for the recruitment of 160. Budget Execution • Official health wage bill execution rates are very high. • However, evidence that not all funded posts may be filled. Recent MoH data shows that there are 1,800 funded posts that are unfilled. Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

10. Human Resource Management Policies and Practices in the Health Sector

11. Creating funded posts • Responsibility for creating funded posts rests outside of MoH. • MoH is responsible for developing staffing requirements for the health sector. Based on a workload assessment for implementing the Kenya Essential Package of Health. • The Department of Personnel Management is responsible for maintaining a approved, but not necessarily funded, establishment. • 2007 establishment was 42,154 • 37,868 positions are funded • 36,068 positions are filled. Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

12. Recruiting health workers • Recruitment process is centralized with many actors and subject to delays. • Job advertisements do not specify the geographic location or type of facility where a vacancy is located. • Applicants are given 14 to 28 days to respond to the advertisement. Interviews are held in Nairobi, with interviewees bearing cost of travel. • Time from when MoH submits request to DPM to when a candidate is selected: • Officially = 6 months • Realistically = 10 – 13 months • PSC capacity is low - 8 officers responsible for screening, 10 clerical officers for filing and sorting, and 20 secretaries. Responsible for hiring of entire civil service of around 190,000 employees. • Many health workers report corruption in hiring process. A 2003 health staffing survey found political patronage to be the biggest influence on staff selection process, followed by nepotism and bribery. Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

13. Recruiting Health Workers • Once hired, MoH assigns health workers to provincial and district offices, which then assign them to facilities. • MoH policy states health workers are not allowed to stay in same post for more than three years. However, 48.5% have stayed in their current post for more than 5 years. • Large geographic imbalances. • 7 doctors per 100,000 in Nairobi • 2 doctors per 100,000 in Nyanza and Western provinces

14. Recruiting health workers • Donor-supported Emergency Hiring Program (EHP) is working to address inefficiencies in recruiting process. • Positions advertised locally • Uses government recruitment procedures • Computerized and delegated recruiting authority from PSC to MoH’s Department of Human Resources. • Took only 10 days to create shortlist of 2,600 from 7,00 applicants. Less than five months after initial advertisement health workers were in posts. • PSC is now developing an online application facility. • EHP is working to increase transparency. • Controls put into place to prevent tampering with selection data. • Interviews posted in newspaper.

15. Tenure • Governed by Kenya’s Code of Regulation for all civil servants and by MoH of Health policy. • Appointment types: • Permanent and pensionable • Permanent and nonpensionable • Temporary (3-12 months) • Casual (up to 3 months) • Contract • Most are on permanent and pensionable contracts. • Until recently, graduates of health-related basic training courses were guaranteed jobs in the public services. • EHP has promoted the hiring on nonpermanent contracts. • 47% of permanent staff members in MoH do not have a letter of confirmation. Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

16. Tenure • Emergency Hiring Program • Beginning in 2006, the government entered into an agreement to use Clinton Foundation, PEPFAR and GFATM to hire more health professionals. • Employment contracts are linked to specific facilities. • Short-term contracts due to constraints on donor funding. • Only 1% of candidates posted in Nairobi.

17. Remuneration • Two types of staff: • On MoH payroll • Casual workers funded out of revenue generated by facilities • Facilities utilize fees to circumvent wage bill ceilings. • Staff on MoH payroll are subject to overall public sector pay scale. • Within each pay grade, there are steps that reflect the length of time and seniority within the pay grade. • Salary reviews in FY 2004/05 and FY 2005/06 decompressed salaries and created more competitive remuneration: • Increased average pay for senior managers by 200-300% • Increased average pay for middle-level managers by 100% • Increased average pay for staff members by 70% Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

18. Remuneration • Allowances comprise large portion of earnings: • Up to 87 different allowances • Allowances account for 45% of MoH wage costs • Housing allowance • Makes up, on average, 21 percent of wage costs. • Nairobi’s housing allowance is highest in the country and creates large incentive to resist transfer out of Nairobi. • A study shows that 11,129 employees are drawing a higher housing allowance than they are entitled. • Hardship allowance • Relatively small • Unlikely to incentivize for staff members to move to these areas. • 1% of overall remuneration • Allowances follow the person and not the post. • In 2005, estimated that KSh 12,296,600 per month (2% of total health wage bill) went to pay housing allowances to not entitled staff members. This could be used to pay an additional 200 doctors or 600 nurses per year.

19. Promotion • Based upon overall civil service norms • Promotion at lower grades is supposed to be automatic after 3 years. At higher levels, promotion is more competitive and based upon available posts. • Plagued by delays and a lack of transparency, leading to frustration and low morale. • MoH has backlog of promotions that should have occurred automatically but have not been made since 1996. • Reforms to improve the process have been introduced. • Strategies to improve performance using results-based management. • Use of performance contracts. • Implementation is slow. • Director of human resources in MoH has performance target of recruiting 3,000 extra staff members by Jun 2007 through the EHP. Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.

20. Government of Kenya and EHP

21. Key Messages • The government of Kenya’s overall wage bill policy is one of several factors that have limited the scaling up of the health workforce. • In the future, the overall wage bill policy is likely to constrain the scaling up of the health workforce even more. • Donor resources have been used successfully to scale up recruitment. • The Ministry of Health could be much more proactive in making the case for a higher share of overall wage bill resources. • The budgeting process for wage bill and non-wage expenditure is not well coordinated. • Major inefficiencies exist in the institutional arrangements for recruiting health workers into the public sector. • Allowances make up a significant portion of total wages but do not provide incentives for good performance. • Promotion policy is not fully adhered to. • The Emergency Hiring Program has demonstrated that success is possible. Source: Vujicic, Ohiri and Sparkes (2009), Working in Health: Financing and Managing the Public Sector Health Workforce, Washington, DC: World Bank.