Facility Improvement Fund and Financial Performance of Public Hospitals in Nyamira County, Kenya

Abstract

Purpose: The study aimed to examine the relationship between the Facility Improvement Fund (FIF) and the financial performance of public hospitals in Nyamira County, Kenya.

Material/methods: A descriptive research design was adopted. Data were collected using structured questionnaires administered to hospital management staff, who possess direct experience in fund allocation, accountability, medical equipment acquisition, and monitoring processes. The study targeted 112 employees across one county referral hospital and eight sub-county hospitals, in line with data from the Ministry of Health (MOH, 2021). Descriptive statistics were used to summarize respondents' perceptions, while regression analysis was conducted to determine the effect of FIF components on financial performance.

Findings: Descriptive results indicated that respondents largely agreed that timely fund allocation, strong accountability mechanisms, strategic acquisition of medical equipment, and consistent fund monitoring positively impact financial performance. Regression analysis confirmed that both fund allocation and accountability mechanisms had a positive and statistically significant effect on the financial performance of public hospitals.

Conclusion: The study concludes that effective facility fund management practices are critical for enhancing the financial performance and operational capacity of public hospitals in Nyamira County. Strengthening these practices is vital for ensuring sustainable healthcare service delivery.

Value: This study provides empirical evidence on the financial implications of Facility Improvement Fund management in the public health sector. It offers actionable recommendations for policymakers and hospital administrators to enhance financial governance, improve resource allocation, and promote institutional accountability.