The Private Sector Innovation Programme for Health (PSP4H)
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1 The Private Sector Innovation Programme for Health (PSP4H) Exploring the Future of Healthcare Programming
2 Lessons Learned for KHF Members Ron Ashkin, PSP4H Team Leader Kenya Healthcare Federation Bi-Monthly Meeting, Nairobi 11 th February 2016
3 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 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 forprofit 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 propoor 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 Pro-Poor Private Sector PSP4H For Profit
6 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 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 Private Sector Can Mean Different Things External No agendas sustainability (top down) Grant funding Government contractors Private Sector Providers depending on objectives Agendas Sustainability based on consumer needs (bottom up) Market funding Commercial players
9 Market Intervention Overview of Market Interventions Partner Live Well (formerly Viva Afya) Tanaka Nursing Home Activity Expanding access to proper path to treatment for low-income earners 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 Business skills training for healthcare providers Network CuraTech Access to quality low cost healthcare through technologytelemedicine Kenya Medical Association Networking for doctors to provide affordable quality primary care
10 Market Intervention Overview of Market Interventions Partner PharmAccess Activity 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 Kilifi County (PPP) Demand side health financing market for the informal sector -Afya Poa Networking of private midwives (MNCH)
11 What we have learned about using a pro-poor market systems approach in the private healthcare sector?
12 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 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 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 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 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 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 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 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 What we have learned about PPPs in health?
21 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 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 Internet and Social Media Check out our Web Site The M4P in Health Portal (research reports and briefs are freely downloadable): or Join our LinkedIn Group M4P in Healthcare : Follow us on
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