Governance of Internally Generated Revenue and Delivery of Health Services in Level 5 Public Hospitals in Kenya

Purpose: The devolution of Governance in Kenya granted counties the authority to mobilize revenues from hospital to enhance public health care delivery. However, persistent disparities in health outcomes among Level 5 public hospitals raise concerns about the role of governance of hospital-generated revenue in health service delivery. This study investigated the influence of governance of internally generated revenue on delivery of health services in Kenya's Level 5 public hospitals, and examined the moderating effect of leadership principles on this relationship.

Materials and Methods: A descriptive cross-sectional design employing quantitative data was used to collect data from 252 healthcare personnel across 13 Level 5 public hospitals in 10 counties in Kenya. Respondents included nurse practitioners, pharmacists, doctors, physical therapists, medical technologists, and administrators. Qualitative data was also collected from patients and key informants to corroborate the quantitative findings. Descriptive statistics and regression analyses were employed for quantitative data analysis.

Findings: The findings revealed a statistically significant but modest positive correlation between governance of hospital-generated revenue and healthcare service delivery, and a strong positive correlation between leadership principles and service delivery. Governance quality explained 25.3% of the variation in health service delivery outcomes when controlling for other factors. Critically, leadership principles significantly moderated this relationship, with strong leadership amplifying the positive effect of governance on service delivery, while weak leadership rendered governance efforts counterproductive. At mean leadership levels, governance showed no significant effect. Nonetheless, the study showed that challenges including operational inefficiencies, transparency deficits, and inequitable revenue allocation persist.

Unique Contribution to Theory, Practice, and Policy: The study concludes that effective governance of hospital-generated revenue, when coupled with strong leadership principles and equitable resource allocation, is essential for strengthening healthcare infrastructure, sustaining services, and ensuring efficient, high-quality care. The study recommends strengthening transparency mechanisms, implementing tiered leadership development, adopting equity-weighted budgeting, and reforming revenue retention frameworks to optimise local revenue mobilisation and service delivery outcomes.

Keywords: Governance of Hospital-Generated Revenue, Health Service Delivery, Devolution, Public Health Financing, Leadership Principles, Level 5 Hospitals, Kenya