PSP4H presentation - Nairobi, Kenya, 11 February 2016

1. Funded by
The Private Sector
Innovation
Programme for
Health (PSP4H)
Exploring the Future of
Healthcare Programming

2. Funded by
Lessons Learned for KHF
Members
Ron Ashkin, PSP4H Team Leader
Kenya Healthcare Federation Bi-Monthly Meeting, Nairobi
11th February 2016

3. Funded by
Today’s Presentation
1. Introduction to PSP4H
2. Why should the private
sector be interested?
3. What we have learned about
using a pro-poor market
systems approach in the
private healthcare sector?

4. Funded by
The Private Sector Innovation Programme for Health
(PSP4H)
• A three-year action research project funded by DFID Kenya
(UKaid) to explore the markets in which poor people pay for-
profit providers for healthcare – a new area for DFID Kenya
• The overall objective of the PSP4H programme is to learn
lessons of how a market systems approach might benefit pro-
poor health interventions, to inform future programming
• DevTracker: “To improve the for-profit health market in Kenya,
so that poor people get better value for money they spend on
health”

5. Funded by
Pro-Poor
Private
Sector
For Profit
PSP4H

6. Funded by
The Private Sector Innovation Programme for Health
(PSP4H)
• PSP4H’s primary target group is low income consumers,
primarily informally-employed daily wage earners who pay
out-of-pocket for healthcare, who do not receive value for
money in healthcare
• PSP4H uses an approach known as M4P (Making Markets
Work for the Poor)
• A basic premise: the working poor are market participants
and represent an underserved market with vast potential
• The point is to foster sustainable healthcare business models
that are a ‘win-win’ – profitable for business while delivering
better value to the working poor (beyond CSR)

7. Funded by
Why Should For-Profit Private Healthcare Businesses
be Interested in Serving Low Income Consumers?
• For-profit private healthcare businesses have an imperative to
grow – growth is not an option
• However, in many cases, the current market is limited to the
top 5% – 7% who clearly “can pay”
• The bulk of employment in Kenya is informal (83.3%)
• Businesses can expand their customer base by going “down
market” and targeting this group as a mainstream strategy
• At 83.3% of employment, our target is actually the MASS
MARKET
• Healthcare businesses that understand this will thrive

8. Funded by
• Agendas
based on
consumer
needs
(bottom up)
• Market
funding
• External
agendas
(top down)
• Grant
funding
“Private Sector” Can Mean Different Things…
Government
contractors
Commercial
players
…depending on
objectives
Private Sector
Providers
No
sustainability
Sustainability

9. Funded by
Overview of Market Interventions
MarketIntervention
Partner Activity
Live Well (formerly Viva
Afya)
Expanding access to proper path to treatment for low-income
earners
Tanaka Nursing Home Generating demand to increase patient volume in W. Kenya
GSK Access to quality assured and affordable asthma medicines
Pharmnet Networking of pharmaceutical retail drug outlets, quality
standards and pooled procurement
City Eye Hospital Access to quality and affordable eye care
PS Kenya - Tunza
Network
Business skills training for healthcare providers
CuraTech Access to quality low cost healthcare through technology-
telemedicine
Kenya Medical
Association
Networking for doctors to provide affordable quality primary
care

10. Funded by
MarketIntervention
Partner Activity
PharmAccess Increased health savings through technology
Kisii County (PPP) Private sector customer care model
Jacaranda Maternity Maternal and child health services among low-income
populations in Nairobi
Labnet (AKMLSO) Networking of laboratories pooled procurement and
standardizing quality
Fountain Africa Trust Community midwife network - BirthWise
Jawabu Empowerement Demand side health financing market for the informal
sector -Afya Poa
Kilifi County (PPP) Networking of private midwives (MNCH)
Overview of Market Interventions

11. Funded by
What we have learned about using a
pro-poor market systems approach in
the private healthcare sector?

12. Funded by
Overarching Lesson
• In Kenya, there are significant
underserved healthcare areas that are
attractive for the private sector:
• Diagnostics
• E-Health/M-Health
• Healthcare Finance
• Low-Cost Delivery Models
• Non-Communicable Diseases
(NCDs)
• Pharmaceutical Supply Chain
• The commercial private sector will find the
best opportunities in these areas (e.g.
large market, demand exceeds supply)

13. Funded by
Leverage Existing Networks – Start at Scale
• Working with aggregations creates scale advantages
(e.g. Pharmnet, Labnet)
• Organic scale-up occurs as independent
interventions addressing different systemic
constraints progress and mature
• Layering and network effects (Viva Afya &
Pharmnet & Afya Poa)
• The network model achieves superior VfM for
development investment as it allows for greater
reach in less time
• Owner/member funded networks are sustainable
(e.g. Pharmnet, Labnet)
• Viable commercial model will attract private third
parties on commercial basis (e.g. Afya Poa,
Pharmnet)
• Higher chances of replicability with network models
(e.g. Labnet East Africa)

14. Funded by
Focus More on Healthcare as a Business
• Quality in both clinical care and
customer care is essential to attract
more clients
• However, few private practices
conduct the economic analysis
needed to run a profitable business
• Low cost – high quality models
include:
• Engineered delivery
• Pooled procurement
• Focused scope of services

15. Funded by
Business Skills Training is Essential, but Must Go
Beyond the Classroom
• Significant number of health
professionals go into private practice
with no business skills
• Business skills training typically
ends with classroom sessions
• To create change and have
business impact, business skills
training must be followed up with
mentoring and specific technical
assistance

16. Funded by
Quick Win Approaches
• Direct market testing based on hypothesis
• “Quick intervention” model just as effective as
conventional intervention
• Much better VfM - market research is expensive
• Build on existing private sector organizations
• Due diligence on regulatory compliance prior to
intervening
• Only work with health cadres already licensed
• Quality assurance within private networks
• Self-regulation (peer review) of quality is more
effective within a network model
• Properly organised networks assist public sector’s
enforcement capacity (e.g. PPB)
• Prioritise areas already identified by the intended
beneficiary

17. Funded by
Health Financing in Kenya
• Out of Pocket (OOP) represents almost
one-half of Kenyan health expenditure
• The poor largely pay for their health
needs albeit OOP
• Insurance coverage nationwide
remains low
• In general the products available
are designed for the formal sector
e.g NHIF.

18. Funded by
Map the Sector Well
• Key health markets are crowded with
multiple donors (e.g. maternal health,
HIV/AIDS, tuberculosis, family planning)
• Mapping the sector before intervening
is critical to ensure private investments
are not crowded out by grants and
subsidies
• Commercial sustainability is difficult in
donor crowded areas
• Presence of grant funding tends to
crowd out commercial investment
• Emerging from PSP4H’s MNCH
interventions

19. Funded by
Heavily Regulated Sector Slows Pace of
Market Roll Out
• Understanding regulation is
critical prior to investing
• Demand side financing
• Licensing of practitioners
• Pharmaceutical regulations

20. Funded by
What we have learned about
PPPs in health?

21. Funded by
Public Private Partnerships (PPP) in Health
• Different definitions of PPPs in health sector hinder opportunities
for private sector
• Gov’t (MOF) and donors (IFC) refer to capital-intensive PPPs
• Business community uses wider definition (e.g. service contracts,
public private dialogue)
• Although counties are interested in partnering with private sector
• Counties often do not have strategic control of the PPP agenda
• Many counties lack skills and capacity
• Most counties do not have policies and processes in place
• Counties should focus on easier PPPs for quick wins
• Avoid capital intensive PPPs, requiring high-level expertise and
Treasury approval for PPPs above KES 5m
• Proven PPPs include service contracts, co-location, referrals

22. Funded by
An Opportunity for the Private Sector in the Counties
• Improved customer care (e.g. Kisii
County).
• Customer service is the primary
reason patients avoid seeking
healthcare from the public
sector
• Bringing a private sector
customer care model to public
services will help alleviate the
problem and improve access

23. Funded by
Internet and Social Media
Check out our Web Site – The M4P in Health Portal
(research reports and briefs are freely downloadable):
www.psp4h.com or www.m4pinhealth.com
Join our LinkedIn Group ‘M4P in Healthcare’:
https://www.linkedin.com/groups/8452836
Follow us on Twitter:
@psp4h