Successes and Failures in Health Market System Interventions: Learnings from PSP4H in Kenya
31st March 2016 Cardno Emerging Markets i
Successes and Failures in Health Market System Interventions: Learnings from PSP4H in Kenya
Private Sector Innovation Programme for Health (PSP4H) Private Sector Innovation Programme for Health (PSP4H)
Prepared for
Department for International Development (DFID)
March 2016
Successes and Failures in Health Market System Interventions: Learnings from PSP4H in Kenya
Private Sector Innovation Programme for Health (PSP4H) Private Sector Innovation Programme for Health (PSP4H)
Successes and Failures in Health Market System Interventions: Learnings from PSP4H in Kenya
31st March 2016 Cardno Emerging Markets ii
Contact Information
Cardno Emerging Markets (UK) Ltd
Oxford House, Oxford Road
Thame
Oxon
UK
OX9 2AH
Telephone: +44 1844 216500
http://www.cardno.com/
Document Information
Prepared for Department for
International Development
(DFID)
Project Name Private Sector Innovation
Programme for Health
(PSP4H)
Date 31st March 2016
http://www.psp4h.com
Implemented by a Cardno Emerging Markets consortium:
With partners:
Funded by the UK Government:
Successes and Failures in Health Market System Interventions: Learnings from PSP4H in Kenya
31st March 2016 Cardno Emerging Markets iii
EXECUTIVE SUMMARY
The DFID-funded Private Sector Innovation Programme for Health (PSP4H) in Kenya follows a market
systems approach known as Making Markets Work for the Poor (M4P). One of PSP4H’s programmatic
objectives is to share lessons from action research conducted via pro-poor private sector market
interventions in health, with a view towards informing future programming and policy. The PSP4H team
drafted this report to document aspects of implementing market interventions that worked – or some
cases did not work – summarized in the table below.
What Works What Doesn’t
Afya Poa-Jawabu: Health insurance plan for informal workers
Involved consumer (informal sector workers)
throughout design and implementation process
Overly ambitious project for timeframe allotted because
insurance is a heavily regulated sector
Product and process match consumer preference and
behaviour (e.g., premium payment pattern matches
earning pattern, mobile-enabled administration)
Managing a consortium takes time and more staff and
can lead to turnover in partners
Cash flow a major constraint to scale up. Did not plan
for adequate financing from beginning
Providers do not easily adapt to the operations
systems designed by the insurers
Bungoma Nurse Midwives: Network of private nurse / midwives in rural communities
Engaged county MOH early on and in multiple
activities (e.g. standards, training, supervision)
Did not invest sufficient time upfront align partner and
program goals and explain M4P approach
Strengthened business skills of network members MOU insufficient tool to manage partner
More than of 1/3 network members apply new skills in
record and financial management
Did not define and reinforce expectations with partner
throughout engagement process
Partner did not produce M&E data as required in the
MOU
Partner had entrenched ‘NGO mentality’ and expected
financial support in return for cooperation
Business Skills Training: Affordable and appropriate BST targeting pro-poor providers
Effective local training provider Institutional home for the BST has not yet been
found Training materials developed by programme as public
domain, so no issues of IP ownership or license fees in
future
Limited curriculum, only 3 most relevant modules
which have direct logical connection to better access
for the poor
Training materials highly localized and in workbook
format
Longitudinal approach to training included follow up
visits to clinic sites to ensure implementation
Low cost delivery model
Succeeded in breaking habit of sitting allowance
High degree of adoption of business changes driven by
training, especially in customer care and financial
recordkeeping
BST easily adaptable to other partners
Successes and Failures in Health Market System Interventions: Learnings from PSP4H in Kenya
31st March 2016 Cardno Emerging Markets iv
What Works What Doesn’t
City Eye Hospital: Delivering Affordable Eye Care and Treatment
Market and consumer research on eyecare, which had
never been done before in Kenya, informed service
design and strengthened business model
Intervention were activities confined to marketing while
partner needed to work on developing a sound
financial business model (i.e., understanding
breakeven, product mix, cross-subsidy) Partner willing to adopt findings from research
Partner well understood the need to go ‘down market’
and serve the low income segment
County Engagement: County executive engagement with PHPs
Able to identify and work with early adopters in two
counties
Challenge to manage county gov’t expectations
Only worked with counties with political support at the
highest levels
Struggled to break gov’t “culture of dependency”
Helped demystify for gov’t who is private sector Most counties initially engaged did not follow through
on their action plans (only 2 of 11 started pilot PPPs) Framed PPPs from management point of view
GSK Asthma: Market research on asthma product
Research acted as a catalyst to demonstrate how
mass market targeted product can fit into GSK’s
business model, as no prior research on asthma
medicine for the low income segment existed
Working in a neglected disease area under NCDs
allowed the intervention to flourish
Research findings renewed the company’s interest in
marketing a product that was seen as not successful
GSK continued to fund a wider asthma care
improvement taskforce partnership after PSP4H
research concluded
Jacaranda Maternal Health Services: Sustainability of quality MH services
Assessment defined target audience well Partner did not understand M4P well, opted for donor
grant funds
Marketing plan helped partner understand how best to
reach this target audience
Partner did not understand balance between ensuring
clinical quality and a sustainable business model
Project designed model for assessing financial
sustainability based on service line offerings and
profitability, but partner did not execute it
Labnet – A branded network of quality assured medical laboratories
Quickly adopted network model pioneered by
Pharmnet
Initial marketing approach had to be changed as route
to market for laboratories differs from other more
consumer-facing services Expanded regionally into neighbouring East African
community countries based on demand from partner
organisations
Complements existing licensed, registered pharmacy
network and forthcoming physician network to close
the loop on affordable quality primary care for low
income consumers
Members pay fees to join the network
Successes and Failures in Health Market System Interventions: Learnings from PSP4H in Kenya
31st March 2016 Cardno Emerging Markets v
What Works What Doesn’t
Pharmnet: Network of licensed pharmacies and sustainability through pooled procurement
Worked with an existing organization (KPA) - member
pharmacies already operating in low income areas;
member pharmacies already fully licensed; human
resource already exists; communication channels
already exist
Many actions from strategic planning were not
followed through by partner
Built on a fully commercial business model to ensure
sustainability
Members pay fees to join the network
Partnered with global British firm Unilever to increase
access to safe, clean drinking water
No easy access to capital as partner did not focus
adequately on building bankable balance sheet and
income statement HR focus to build organizational capacity, particularly
in pooled procurement
Focus on branding and marketing helped franchise
network expand quickly, driven by member demand
Invested time to educate partner on M4P approach
Created performance culture by linking PSP4H support
to performance. Pro-actively communicated
expectations
Partner frequently lost focus when enticed by attractive
non-core deals and activities
Frequent strategic planning meetings to keep
management’s ‘eyes on the prize’
Focus on real critical issues and not wish list or laundry
list
Existing and future links to other interventions and
networks such as Viva Afya, business skills, Afya Poa,
midwives
Slow growth of pooled procurement; difficult to change
price-driven buyer behavior
Helped Labnet get started quickly through shared
experience
Assisted KPA to establish and maintain government
relations
PSK-Tunza: Affordable medicines for PHPs serving the poor through pooled procurement
Partner cooperative on data collection Regulatory obstacles discovered after intervention
underway made implementation difficult
Tanaka Nursing Home: Increasing access to affordable healthcare for low income earners
Well-designed intervention focused on demand
creation involved consumers and providers throughout
design and implementation process. Outreach and
services match consumer preferences and behaviours
Did not anticipate added costs of services to respond
to increased demand. Could hinder scale up and long-
term sustainability
Partner cooperative with provision of data Partner did not have strategic action plan addressing
what to do next following success of demand creation
exercise
Intervention outreach programme helped partner
understand how to target and reach consumers, and
consumers gained knowledge that they can access
affordable quality healthcare through the private sector
Viva Afya (now Live Well): Increasing access to affordable health care for low income earners
Focused on learning one thing - how to increase
footfall/consultations
Did not invest sufficient time during the pilot to ensure
staff buy-in
Partner contributed fully to execution of market tests Inadequate consumer marketing to complement the
promotions at the clinics
Successes and Failures in Health Market System Interventions: Learnings from PSP4H in Kenya
31st March 2016 Cardno Emerging Markets vi
What Works What Doesn’t
Partner conducted all data collection for market tests Partner reticent to provide any financial data for M&E
which is necessary to evidence ‘win-win’ nature of the
intervention
Staff turnover hindered execution of tests
The PSP4H programme pushed the frontier on market based approaches by applying and adapting M4P
methodologies in the health sector. The team experimented in different areas: in tools and
methodologies, in different markets and systems, and with different types of private health providers. In
two and half years, the programme has learned important lessons that can be applied in forthcoming M4P
health programmes in other LMICs. Although the programme learned and documented many interesting
lessons in a short period of time (two and one-half years), a market-based programme needs more time
for intervention partners to act on the programme’s recommendations, strengthening their business
models, see if they can operate independently of programme support and to evaluate and document
whether the interventions will produce their intended health results – delivering quality health services
and products that are affordable for low income earners.
PSP4H is optimistic that its experience will prompt others – international donors, international health
experts and practitioners, and governments – to apply market systems approaches to strengthen overall
health systems and harness the private sector’s capacity to deliver pro-poor health services. Moving
forward, future health market-based programmes can build on PSP4H’s experience, apply PSP4H’s
recommendations on implementation so more interventions will be successful and foster continued
learning on how to apply market systems approaches in health.
Successes and Failures in Health Market System Interventions: Learnings from PSP4H in Kenya
31st March 2016 Cardno Emerging Markets vii
ACRONYMS
ACRONYM Full Spelling
CEC County Executive Committee
DHS Demographic Health Survey
DFID Department for International Development (UK)
EA East Africa
GSK GlaxoSmithKline
HIV/AIDS Human Immunodeficiency Virus Infection and Acquired Immune Deficiency Syndrome
HRH Human Resources for Health
HSA Health Savings Account
KPA Kenya Pharmaceutical Association
KPI Key Performance Indicator
LMIC Low- and Middle-Income Countries
M4P Making Markets Work for the Poor
MH Maternal Health
MI Market Intervention
MoH Ministry (or Ministries) of Health
MSI Marie Stopes International
NCD Non-Communicable Disease
OECD Organization for Economic Co-operation and Development
OOP Out-of-Pocket
PEPFAR President's Emergency Plan for AIDS Relief
PFP Private For-Profit
PHP Private Health Providers
PNFP Private Not-for-Profit
PSI Population Services International
PSP4H Private Sector Innovation Program for Health
SSA Sub-Saharan Africa
TNH Tanaka Nursing Home
USAID United States Agency for International Development
VfM Value for Money
ACKNOWLEDGEMENTS
PSP4H would like to acknowledge the work of Barbara O’Hanlon, Insight Health Advisers, as the lead writer
on this report. We acknowledge the contributions of those interviewed for the report, particularly PSP4H
Team Leader Ron Ashkin, Intervention Managers Rachel Gikanga, Mildred Kottonya, Chris Masila,
Ambrose Nyangao, Dolapo Olusanmokun and Daniel Shikanda as well as assistance and
recommendations from Dr Nelson Gitonga.
RECOMMENDED CITATION
Private Sector Innovation Programme for Health (PSP4H), 2016. Successes and Failures in Health
Market System Interventions: Learnings from PSP4H in Kenya.
Successes and Failures in Health Market System Interventions: Learnings from PSP4H in Kenya
31st March 2016 Cardno Emerging Markets viii
Table of Contents
EXECUTIVE SUMMARY iii
ACRONYMS vii
1 INTRODUCTION 1
1.1 PSP4H Key Messages 1
1.2 Report Structure 2
2 PSP4H INTERVENTION PORTFOLIO 3
3 PSP4H’S IMPLEMENTATION EXPERIENCE 5
3.1 Afya Poa – Removing Economic Barriers to Health for Informal Workers 8
3.2 Birth Wise – Ensuring Access to Skilled Birth Attendants in Rural Areas 9
3.3 Business Skills Training – Ensuring Sustainability for Frontline Healthcare Providers 11
3.4 City Eye Hospital – Delivering Affordable Eye Care and Treatment 13
3.5 County Engagement – Developing a Viable and Replicable PPP Approach 14
3.6 GSK Asthma Products – Making Effective Asthma Treatment Affordable 15
3.7 Jacaranda Maternity Services – Ensuring Quality Maternal Care in Peri-Urban Areas 16
3.8 LABNET – A Branded Network of Quality Assured Medical Laboratories 17
3.9 PHARMNET – Increasing Access to Affordable, Quality Medicines 18
3.10 PSK Tunza – Pooled Procurement for Essential Medicines 20
3.11 Tanaka Nursing Home – Generating Demand to Increase Patient Volume 21
3.12 Viva Afya (now Live Well) – Increasing Access to the Proper Path to Treatment 22
4 LESSONS LEARNED 24
4.1 Some selection criteria are more important than others 24
4.2 Align partner expectation with M4P principles 24
4.3 Network of networks is an effective strategy to reach scale 25
4.4 Intervention strategies can break the culture of dependency 25
4.5 There is no “right” length of time for interventions 25
4.6 Balancing quality with business model – is there a trade-off? 26
5 CONCLUSIONS 27
Tables
Table 1. PSP4H Active Intervention Portfolio as of 31st March 2016 .......................................................... 3 Table 2: What Works and What Doesn't: Highlights from PSP4H Interventions .......................................... 5
Figures
Figure 1: Afya Poa Partners .......................................................................................................................... 9
Successes and Failures in Health Market System Interventions: Learnings from PSP4H in Kenya
31st March 2016 Cardno Emerging Markets 1
1 INTRODUCTION
The purpose of this report is to share what PSP4H has learned about what works
and does not work in its portfolio of health market interventions
With development efforts in the last decades focused on improving the public sector health markets,
private health markets in East Africa (EA) have been relatively neglected by governments and
development partners as a possible strategy to address health challenges confronting low income
populations. There is little evidence on how best to intervene in health markets and engage the private
for-profit sector to benefit lower economic segments of the population.
The United Kingdom Department for International Development’s (DFID, aka UK Aid) response to the
situation is an action research programme in Kenya to foster better understanding on how the private for-
profit health sector can benefit the working poor. The Private Sector Innovation Programme for Health
(PSP4H) – implemented by Cardno Emerging Markets and consortium partners – utilises a market systems
approach known as Making Markets Work for the Poor (M4P), the first time a dedicated M4P programme
has been commissioned in the healthcare sector. Using the M4P approach, PSP4H works to strengthen
the overall healthcare market system, increase the private for-profit health sector’s capacity to reach the
poor, and measure improved access and value for the money (VfM) for the poor gained through partner
interventions.
As the text box indicates, one of PSP4H’s programmatic objectives is to share lessons about different pro-
poor market interventions in health. In this spirit, the PSP4H team drafted this report to document the
different aspects of implementing market interventions that worked, or – equally important – did not
work. This report also allowed the PSP4H team to reflect on what lessons we have learned about applying
a market based approach in the health sector so that international donors, development partners,
government officials and other health practitioners can adopt this approach in their forthcoming health
programmes.
1.1 PSP4H Key Messages
Four key messages emerged from the initial two years of PSP4H’s work and continue to evolve:
Private sector providers can sustainably deliver quality, affordable healthcare services to low-
income earners as a mainstream business model;
PSP4H programme objectives include:
Understanding poor consumers’ provider preference, health seeking behaviour and willingness and ability to pay.
Identifying and piloting appropriate pro-poor interventions by the commercial health sector.
Conducting action research to explore how the private health sector can deliver affordable quality healthcare to the poor as a mainstream business model.
Providing robust evidence on the outcomes and impact of that action research.
Sharing lessons learned from the different pro-poor health market interventions in order to inform future programme design.
Successes and Failures in Health Market System Interventions: Learnings from PSP4H in Kenya
31st March 2016 Cardno Emerging Markets 2
The for-profit private sector is an integral part of ensuring an overall functioning healthcare
system in Kenya, complementing both the Government and the not-for-profit sector;
Start at scale by leveraging existing networks, thereby quickly increasing the poor’s access to
health services and products; and
The market systems approach is both effective and efficient when applied to healthcare and
should be used in future healthcare development programmes.
1.2 Report Structure
The report is organized into five sections. The second section offers an overview of PSP4H’s portfolio of
market interventions. The third section delves into the successes and challenges encountered while
implementing market interventions. The fourth section reflects on the team’s lessons learned on applying
a market system approach in the health sector. And the final section, concludes with remarks for the
international health community on how to apply market system approach in health programming.
Successes and Failures in Health Market System Interventions: Learnings from PSP4H in Kenya
31st March 2016 Cardno Emerging Markets 3
2 PSP4H INTERVENTION PORTFOLIO
The programme conducts action research through an active, adaptive portfolio of
pilot market interventions in cooperation with private sector partners
Table 2 offers a summary of the active PSP4H intervention portfolio as of 31st March 2016, categorised
by health market area. Illustrations of successes and failures from PSP4H intervention experience
follows in Section 3, which includes examples of interventions which are no longer active.
Table 1. PSP4H Active Intervention Portfolio as of 31st March 2016
Health Market Area Partner Intervention
Description
PSP4H Support
Activities
Healthcare Finance Jawabu - Afya Poa Mobile-enabled health
insurance and health
savings plan for
informal workers
Marketing strategy and
branding
Capacity building
Low-Cost Delivery
Models
Kenya Medical Association
(KMA) - Docnet
Branded network of
consulting physicians
offering affordable
quality primary care
Networking
Marketing strategy and
branding
City Eye Hospital Affordable eye care
and treatment (Aravind
model)
Market research
Business modelling
Marketing strategy
Population Services Kenya
(PSK) / Tunza Clinics
Affordable and
appropriate business
skills training targeting
pro-poor clinicians
Business skills training
Market research
Livewell (formerly Viva Afya) Increasing access to
affordable “correct
path” healthcare for low
income earners
Test marketing
Business modelling
Tanaka Nursing Home Increasing access to
affordable healthcare
for low income earners
Test marketing
Business modelling
Maternal Health Jacaranda Maternity
Hospital
Sustainability of quality
maternal health
services
Market research
Marketing strategy
Business modeling
Non-Communicable
Diseases
GlaxoSmithKline (GSK) Market research on
affordable asthma
treatment for low
income earners
Market research
Business modelling
Marketing strategy
Public Private
Partnerships
Kilifi County Partnership between
county government and
private midwives to
increase access to
skilled delivery in rural
communities
Capacity building
Networking
Successes and Failures in Health Market System Interventions: Learnings from PSP4H in Kenya
31st March 2016 Cardno Emerging Markets 4
Health Market Area Partner Intervention
Description
PSP4H Support
Activities
Kisii County Bringing a private
sector customer care
model to public sector
hospitals
Market research
Capacity building
Kenya Healthcare
Federation (KHF)
Evidence to support a
positive policy
environment for private
healthcare providers
Research
Advocacy support
Supply Chain Kenya Pharmaceutical
Association (KPA)/Nairobi
TechPharm (NTP) -
Pharmnet
Branded network of
licensed pharmacies
and sustainability
through pooled
procurement
Networking
Quality assurance
Marketing strategy and
branding
Capacity building
Business modelling
(pooled procurement)
Association of Kenya
Medical Laboratory Scientific
Officers (AKMLSO) - Labnet
Branded network of
independent diagnostic
laboratories with
common quality
standards
Networking
Marketing strategy and
branding
Successes and Failures in Health Market System Interventions: Learnings from PSP4H in Kenya
31st March 2016 Cardno Emerging Markets 5
3 PSP4H’S IMPLEMENTATION EXPERIENCE
The programme’s field based learning revealed tools, research design and
implementation modalities that worked – and in some cases, failed
This section presents these findings by sharing our experience in a select number of market interventions.
Table 2 below offers a summary of work works and does not work in terms of the programme’s
intervention activities. It is important for the development community that failures are well-documented,
not only successes. As a research programme, PSP4H has the luxury of documenting failures for
knowledge’s sake without jeopardizing the programme’s credibility as an implementer. This is particularly
important in emerging healthcare market areas such as healthcare finance and mobile and e-health,
where commercial considerations have commonly overwhelmed the search for evidence and lessons
learned from failed business models are seldom made publicly available to inform future programming
decisions. Learning from failure is a powerful tool.
Table 2: What Works and What Doesn't: Highlights from PSP4H Interventions
What Works What Doesn’t
Afya Poa-Jawabu: Health insurance plan for informal workers
Involved consumer (informal sector workers)
throughout design and implementation process
Overly ambitious project for timeframe allotted because
insurance is a heavily regulated sector
Product and process match consumer preference and
behaviour (e.g., premium payment pattern matches
earning pattern, mobile-enabled administration)
Managing a consortium takes time and more staff and
can lead to turnover in partner
Cash flow a major constraint to scale up. Did not plan
for adequate financing from beginning
Providers do not easily adapt to the operations
systems designed by the insurers
Bungoma Nurse Midwives: Network of private nurse / midwives in rural communities
Engaged county MOH early on and in multiple
activities (e.g. standards, training, supervision)
Did not invest sufficient time upfront align partner and
program goals and explain M4P approach
Strengthened business skills of network members MOU insufficient tool to manage partner
More than of 1/3 network members apply new skills in
record and financial management
Did not define and reinforce expectations with partner
throughout engagement process
Partner did not produce M&E data as required in the
MOU
Partner had entrenched ‘NGO mentality’ and expected
financial support in return for cooperation
Business Skills Training: Affordable and appropriate BST targeting pro-poor providers
Effective local training provider Institutional home for the BST has not yet been
found Training materials developed by programme as public
domain, so no issues of IP ownership or license fees in
future
Limited curriculum, only 3 most relevant modules
which have direct logical connection to better access
for the poor
Training materials highly localized and in workbook
format
Successes and Failures in Health Market System Interventions: Learnings from PSP4H in Kenya
31st March 2016 Cardno Emerging Markets 6
What Works What Doesn’t
Longitudinal approach to training included follow up
visits to clinic sites to ensure implementation
Low cost delivery model
Succeeded in breaking habit of sitting allowance
High degree of adoption of business changes driven by
training, especially in customer care and financial
recordkeeping
BST easily adaptable to other partners
City Eye Hospital: Delivering Affordable Eye Care and Treatment
Market and consumer research on eyecare, which had
never been done before in Kenya, informed service
design and strengthened business model
Intervention were activities confined to marketing while
partner needed to work on developing a sound
financial business model (i.e., understanding
breakeven, product mix, cross-subsidy) Partner willing to adopt findings from research
Partner well understood the need to go ‘down market’
and serve the low income segment
County Engagement: County executive engagement with PHPs
Able to identify and work with early adopters in two
counties
Challenge to manage county gov’t expectations
Only worked with counties with political support at the
highest levels
Struggled to break gov’t “culture of dependency”
Helped demystify for gov’t who is private sector Most counties initially engaged did not follow through
on their action plans (only 2 of 11 started pilot PPPs) Framed PPPs from management point of view
GSK Asthma: Market research on asthma product
Research acted as a catalyst to demonstrate how
mass market targeted product can fit into GSK’s
business model, as no prior research on asthma
medicine for the low income segment existed
Working in a neglected disease area under NCDs
allowed the intervention to flourish
Research findings renewed the company’s interest in
marketing a product that was seen as not successful
GSK continued to fund a wider asthma care
improvement taskforce partnership after PSP4H
research concluded
Jacaranda Maternal Health Services: Sustainability of quality MH services
Assessment defined target audience well Partner did not understand M4P well, opted for donor
grant funds
Marketing plan helped partner understand how best to
reach this target audience
Partner did not understand balance between ensuring
clinical quality and a sustainable business model
Project designed model for assessing financial
sustainability based on service line offerings and
profitability, but partner did not execute it
Labnet – A branded network of quality assured medical laboratories
Quickly adopted network model pioneered by
Pharmnet
Initial marketing approach had to be changed as route
to market for laboratories differs from other more
consumer-facing services Expanded regionally into neighbouring East African
community countries based on demand from partner
organisations
Successes and Failures in Health Market System Interventions: Learnings from PSP4H in Kenya
31st March 2016 Cardno Emerging Markets 7
What Works What Doesn’t
Complements existing licensed, registered pharmacy
network and forthcoming physician network to close
the loop on affordable quality primary care for low
income consumers
Members pay fees to join the network
Pharmnet: Network of licensed pharmacies and sustainability through pooled procurement
Worked with an existing organization (KPA) - member
pharmacies already operating in low income areas;
member pharmacies already fully licensed; human
resource already exists; communication channels
already exist
Many actions from strategic planning were not
followed through by partner
Built on a fully commercial business model to ensure
sustainability
Members pay fees to join the network
Partnered with global British firm Unilever to increase
access to safe, clean drinking water
No easy access to capital as partner did not focus
adequately on building bankable balance sheet and
income statement HR focus to build organizational capacity, particularly
in pooled procurement
Focus on branding and marketing helped franchise
network expand quickly, driven by member demand
Invested time to educate partner on M4P approach
Created performance culture by linking PSP4H support
to performance. Pro-actively communicated
expectations
Partner frequently lost focus when enticed by attractive
non-core deals and activities
Frequent strategic planning meetings to keep
management’s ‘eyes on the prize’
Focus on real critical issues and not wish list or laundry
list
Existing and future links to other interventions and
networks such as Viva Afya, business skills, Afya Poa,
midwives
Slow growth of pooled procurement; difficult to change
price-driven buyer behavior
Helped Labnet get started quickly through shared
experience
Assisted KPA to establish and maintain government
relations
PSK-Tunza: Affordable medicines for PHPs serving the poor through pooled procurement
Partner cooperative on data collection Regulatory obstacles discovered after intervention
underway made implementation difficult
Tanaka Nursing Home: Increasing access to affordable healthcare for low income earners
Well-designed intervention focused on demand
creation involved consumers and providers throughout
design and implementation process. Outreach and
services match consumer preferences and behaviours
Did not anticipate added costs of services to respond
to increased demand. Could hinder scale up and long-
term sustainability
Partner cooperative with provision of data Partner did not have strategic action plan addressing
what to do next following success of demand creation
exercise
Intervention outreach programme helped partner
understand how to target and reach consumers, and
consumers gained knowledge that they can access
affordable quality healthcare through the private sector
Successes and Failures in Health Market System Interventions: Learnings from PSP4H in Kenya
31st March 2016 Cardno Emerging Markets 8
What Works What Doesn’t
Viva Afya (now Live Well): Increasing access to affordable health care for low income earners
Focused on learning one thing - how to increase
footfall/consultations
Did not invest sufficient time during the pilot to ensure
staff buy-in
Partner contributed fully to execution of market tests Inadequate consumer marketing to complement the
promotions at the clinics
Partner conducted all data collection for market tests Partner reticent to provide any financial data for M&E
which is necessary to evidence ‘win-win’ nature of the
intervention
Staff turnover hindered execution of tests
3.1 Afya Poa – Removing Economic Barriers to Health for Informal Workers
Background
Achieving equity in health and health financing is a policy priority for the
Government of Kenya’s (GOK). There is general agreement among key
health sector stakeholders that Kenya desires universal health coverage,
but there continues to be disagreement over how this should be
implemented. In recent years there have been attempts to provide
insurance to informal workers but this has mostly been limited to life
insurance. Attempts to provide other micro-health insurance products have not been successful due to
the lack of understanding of this market segment, inadequate actuarial data, small risk pools, unaffordable
prices, poor delivery mechanisms and unconducive regulatory framework.
Jawabu Empowerment Ltd. developed an affordable and appropriate health insurance product – Afya Poa
– for the informally employed, who constitute over 80% of Kenya’s workforce. The product is a
combination of health insurance and health savings account (HSA). The health insurance covers inpatient
needs for the whole family. The HSA is to be accessed by the member whenever seeking outpatient
treatment. PSP4H partnered with Jawabu to introduce this new product into the market place.
What Works and What Doesn’t
Successes | Jawabu – a for-profit commercial firm – is a unique partner
for PSP4H. Its mission is to fulfil the financial needs of Kenyans working
in the informal sector. Jawabu has an unparalleled understanding of the
informal sector (Jua kali). In the past, they developed several successful
and profitable financial products for this target group including life
Insurance, credit facility, pension plan and affordable housing. Jawabu
mobilized consumer representatives to help design the health insurance
product and roll-out strategy. As a result, the product and consumer experience match the Jua Kali’s
preference and behavior. For example, the premium payment matches informal worker’s earning
patterns and the mobile platform to sell the Afya Poa matches the preferences of the day labourer who
would lose income if s/he took time off to see an agent.
What Works
PSP4H and intervention partner actively involved consumer representatives – day laborers –throughout the design and roll-out of Afya Poa.
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Challenges | Afya Poa is
one of PSP4H’s longest
running as well as most
complicated market
interventions. Jawabu has
all the institutional
components needed to
successfully introduce Afya
Poa: (i) Jawabu’s pension
fund has netted over 350,000 members in less than 3 years,
(ii) Jawabu has over 1,000 agents through its multiple
financing instruments to market Afya Poa, and (iii) Jawabu
has signed a ten-year exclusive joint venture agreement with
the Kenya Clinical Officer Association (KCOA) and Kenya
Progressive Nurses Association (KPNA) providing access to
over 6,000 outpatient health centres nationwide. Yet the partners have encountered several hurdles
along the way which delayed introduction of Afya Poa into the market. The first challenge is related to the
sector - insurance is heavily regulated and the approval process took much longer than anticipated
(approximately one and a half years).
Second, Afya Poa’s success is built on a partnership of different and diverse types of organizations, ranging
from insurance underwriters to commercial banks to IT management firms to a sales force and to health
service providers (Figure 1). A consortium requires constant engagement not only with each partner but
also facilitation between partners. Also, a consortium runs the risk of turn-over in partners which
happened several times with the underwriter and financial investor partners.
Like many private health business ventures, Afya Poa has struggled to
secure capital. The key partner who was the cash investor (and not a
financial institution) was not forthcoming about the availability of
capital. At the end of the day, the investor pulled out of the deal, leaving
Jawabu without the finances to capitalize the insurance program and to
ensure a steady cash flow to forward-fund the HSAs for each new client.
An alternative financing mechanism took a while to arrange. The scramble for financing created further
delays. Jawabu finally launched Afya Poa in November, 2015. However, scale-up is still hindered by the
lack of cash flow.
3.2 Birth Wise – Ensuring Access to Skilled Birth Attendants in Rural Areas
Background
Maternal mortality remains a major challenge in Kenya. The private sector
contributes substantially to the provision of health services in Kenya and
specifically in maternal and newborn health services. Community midwives
play an important role as private providers but their contribution to skilled
What Doesn’t Work
Absence of a contingency plan for financing and ensuring cash flow created delays in start-up and scaling.
What Doesn’t Work
Start-ups in heavily regulated areas such as insurance and hospital services, will take a long time to launch and the time frame cannot always be controlled by the partner. Keeping to a tight time frame will be difficult.
Figure 1: Afya Poa Partners
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delivery is not well documented. Information gaps exist regarding the level of organisation and investment
necessary to optimize private sector contribution towards improving access to maternal health services.
PSP4H supported Fountain Africa Trust (FAT) to establish a network of community midwives (CM) who
live and work in rural communities located in Bungoma County. The intervention trained network
members in selected technical areas with special emphasis in family planning and business skills, created
a brand (Birth Wise) for the network, and developed a marketing plan to create awareness of health
services offered by Birth Wise community midwives.
What Works and What Doesn’t
Successes | During the design phase, the PSP4H’s assessment revealed that many of the community
nurse midwives used out-of-date practices and did not have access to clinical
training and supportive supervision to continue their medical education.
Early on, PSP4H conducted several trainings to refresh their clinical skills and
bring them in line with current MOH standards. During start-up and
throughout implementation, PSP4H involved county MOH leadership and
technical staff in key activities, such as training, standards, supervision and
referrals. As a result, MOH “bought into” the idea of collaborating with and
supporting a network of private midwives as a way to extend the reach of skilled care, and to this day,
continue to involve Birth Wise members in MOH trainings and supportive supervision.
In addition, PSP4H conducted business skills training with Birth Wise members to help them become more
financially sustainable (business skills training is described in more detail in section 3.3 below). Forty-nine
members participated in the training that covered 1) cash flow management, 2) inventory management,
and 3) business communication skills and customer relations. Upwards of one-third of the network
members who were trained apply these new skills in recordkeeping and financial management. And a
quarter of the trained midwives experienced modest improvement in monthly profits. However, the Birth
Wise members did not succeed in significantly increasing the number of deliveries per month over the
course of the intervention – the number grew from 3.0 to 3.7 compared to the target of 5.6.
Challenges | The PSP4H team struggled from the beginning and
throughout implementation to communicate and make the partner
understand the M4P approach. The Birth Wise evaluation noted that it
may be harder for NGOs like FAT to adopt a commercial mindset and
understand cost-sharing as part of an intervention. NGOs that have
previously relied on donor funds may not fully understand a market-
driven view of sustainability and expect grants as well as technical
assistance. Despite continued efforts, the partner still expected direct
funding and eventually secured a cash grant from another DFID program,
and failed to inform the intervention manager about the donor support.
In addition, the partner never fully “bought into” the terms outlined in the MOU, such as collecting and
reporting regularly on key performance indicators (KPIs) needed to document the intervention’s impact.
Contributing factors may be: (i) insufficient time invested during the MOU negotiation to ensure partner’s
expectations are aligned with the programme objectives; (ii) partner’s performance not clearly defined in
concrete terms (e.g. manageable KPIs); (iii) expectations not continuously reinforced throughout periodic
What Works
Government engagement fosters political buy-in and support for an intervention and integrates PHPs into local health system.
What Doesn’t Work
An MOU may not be sufficient to align a partner’s and the program’s expectations. Clearly defined KPIs and constant reinforcement of expectations throughout the engagement process are critical.
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reviews of work plan; and (iv) programme support and assistance not linked to performance. With no
consequences for inaction and non-compliance with the MOU, and a source of cash funding found
elsewhere, the partner lost interest in the market intervention. PSP4H terminated the MOU.
Unfortunately, given the distance to Bungoma, partner engagement by
the original intervention manager was inconsistent and irregular.
While the concept note has a detailed action plan which states what
activities to be implemented, performance review meetings were not
held regularly, like in the case of PHARMNET, to review the action plan
and to address implementation problems as they occurred.
Another factor contributing to the unsuccessful intervention was that
the intervention design was not fully M4P compliant and went beyond
the technical assistance scope of the project. The intervention included activities to support FAT to
establish a revolving fund for its network member. FAT expected PSP4H to provide capitalization for this
fund which is not compliant with the program’s M4P approach which shies away from direct intervention.
In addition, the measurement plan did not account for the time needed to achieve results. In this
intervention, the impact expected after one year of implementation is a 40% increase in the number of
deliveries. It takes nine-months for a woman to go through the gestation period; hence the 40% target
within a year is unrealistic. Realistically, it would take at least 2 years, and ideally 4 to 5 years, to realize
the suggested results.
3.3 Business Skills Training – Ensuring Sustainability for Frontline Healthcare Providers
Background
Clinical personnel in Kenya are trained to deliver healthcare
services that meet standards of care as defined by their
scope of operation and their licensing bodies. However,
healthcare providers are not trained in economics or
business as part of their professional qualifications and
therefore generally lack the business skills necessary to
ensure that their private practice is profitable. This skills
gap translates to poor, unreliable and potentially expensive
services for lower income groups of the population and is a significant barrier to access.
PSP4H is assisting PSK TUNZA, PHARMNET, LABNET, Jacaranda and Birth Wise network providers to
strengthen their business skills. The three training modules are: 1) cash flow management for clinics and
retail pharmacies, 2) inventory management for clinics and retail pharmacies, 3) business communication
skills and customer relations. With the help of a trainer, on completion of the training participants prepare
individual business work plans to apply skills learned in the classroom into their businesses. A series of on-
site mentoring and coaching sessions begin within one month of training to encourage implementation
and reinforce skills learned. PSP4H has been able to deliver the training at an average cost of
approximately 30 GBP per trainee per day, the most affordable such training in the market.
What Doesn’t Work
Expecting the partner to
understand M4P. More emphasis
should be placed on rigorously
screening the intervention
activities at the concept stage to
ensure they are M4P compliant.
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What Works and What Doesn’t
Successes | The PSP4H business skills training (BST) model is based on several elements that combined
to make the overall training programme popular and successful among the more than 400 clinicians who
have passed through the programme to date.
i. Effective local training provider. PSP4H engaged an experienced
Kenyan trainer with background in SME training who was able to connect
easily with the audience and adapt delivery to an appropriate level of
understanding.
ii. Training materials developed as public domain. PSP4H adopted
an ‘open source’ strategy for its training materials so they could be
widely shared without issues of ownership or license fees.
iii. Limited curriculum. The BST curriculum consists of only three
modules, which are the modules most relevant to PSP4H’s ‘win-win’
approach to intervention – they promote business sustainability while having a direct logical
connection to better access for the poor.
iv. Highly localized training materials. PSP4H developed original training materials localized to the
Kenyan context rather than using off-the-shelf textbooks or case studies. The materials use a
workbook format so participants can use their own data and put learnings into action.
v. Longitudinal approach to training. After three days of classroom training, the training team visited
each participating facility to ensure understanding of the materials, encourage implementation
of the learnings, and collect data for monitoring and evaluation.
vi. Low cost delivery model. The BST was designed to be affordable to private clinicians serving the
low income market who have limited cash resources and cannot afford to lose much time away
from work. In order to be sustainable in the future, the training has to be within the means of the
target audience. The average cost of delivery was 30 GBP per trainee per day.
vii. Succeeded in breaking the habit of the sitting allowance. PSP4H does not pay “sitting allowances”
to attend the BST and initially experienced some resistance from clinicians who were conditioned
to receiving cash to attend trainings from other donor-funded programmes. Subsequently, PSP4H
has had no problems attracting PHPs to attend trainings.
viii. High degree of adoption of business changes driven by training. Monitoring and evaluation data
shows a high degree of uptake of the business improvements recommended in classroom
training, particularly in customer care and inventory management where some improvements
were adopted by over 80% of trainees.
ix. BST easily adaptable to other partners. The original pilot was designed for PS Kenya’s Tunza clinics
but was quickly taken up by other programme partners – PHARMNET, Birth Wise, LABNET and
Jacaranda have all benefitted from BST to date.
Challenges | PSP4H and partners are exploring with government training institutions ways to
incorporate BST modules into their curricula for medical professionals as well as seeking private sector
organizations who can provide BST as a member service, but an institutional home for the BST has not yet
been found.
What Works
Curriculum limited to the essentials, low cost delivery, local service provider, open source training materials customized and tested for the target audience, longitudinal follow up
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3.4 City Eye Hospital – Delivering Affordable Eye Care and Treatment
Background
Ophthalmology has largely been neglected in Kenya; the few public and NGO facilities that offer eye care
are overwhelmed, while private facilities are too expensive for most to afford. Yet India has successfully
scaled-up eye care hospitals that offer affordable, quality services for literally tens of thousands of low-
income clients. City Eye Hospital (CEH) is a full-service eye clinic serving both low- and high-end markets
which is attempting to replicate India’s successful Aravind Eye Hospital model in Kenya. Their long-term
plans include opening five hospitals with a chain of vision centres that will serve as referral centres and a
robust outreach program targeting the poor.
PSP4H is assisting its partner CEH to improve access among the working poor to quality, low-cost eye care
services. The intervention activities include: 1) conducting market research to better understand the
market for eye care in Nairobi and its environs, 2) designing marketing strategies to capture low-income
earners as new clients, and 3) pilot a cross-subsidy business model similar to India’s Aravind Eye Hospital.
What Works and What Doesn’t
Successes | City Eye Hospital is similar to other PSP4H interventions in that they want to expand
services to low income earners but are unfamiliar with the needs and behaviours of this consumer
segment. PSP4H-supported consumer and market research has been successful in informing CEH on: (i)
the most common eye problems; (ii) consumer attitude, knowledge and practice on eye care; (iii) health
seeking behavior for eye care; and (iv) willingness and ability to pay for eye care services and cataract
surgery. With this information, CEH developed a range of services at appropriate prices, with payment
terms comfortable for this target group. Also, they compared their services and price points to other eye
care services available to low income earners (Lions, Loresho and PCEA Kikuyu Eye Hospital), and designed
appropriate marketing strategies to reach this group.
City Eye Hospital, like Jawabu, also involved consumers and providers
throughout the entire intervention process. Consumer involvement
confirmed PSPH primary research findings that the working poor are
willing and able to pay for private health services when services are
convenient and offer high value for money. Consumer involvement also
helped City Eye develop a service package responsive to this consumer
group’s preferences.
Challenges | Long-term sustainability of this low-cost model could be
at risk because City Eye: (i) has not adequately modeled the financial
implications of the Aravind-based cross-subsidy business model, where
high-margin services and high-income patients effectively subsidize care
for low income patients; (ii) has not yet been able to establish a
favorable pricing structure that can attract sufficient patients from the
low income consumer segment; and (iii) does not yet have sufficient
cash flow to pay for the marketing to raise awareness of the availability
What Doesn’t Work
Confining intervention activities to marketing and serving customer needs without engaging at the financial level and modeling service line profitability based on utilization and cost of delivery.
What Works
Involving consumers at the design stage design helps the partner offer health services and products appropriate for and responsive to the needs and preferences of low income earners.
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and affordability of these services. The intervention found itself in a similar situation as the interventions
in Tanaka Nursing Home and Afya Poa: insufficient anticipation of rising costs associated with increased
in-patient flow and planning for capital need to investment in equipment, skilled personnel and facility
upgrades.
3.5 County Engagement – Developing a Viable and Replicable PPP Approach
Background
Following PSP4H’s 2014 DFID Annual Review, one of the recommendations was for the programme to
establish partnership with at least one county government to develop a viable and replicable PPP approach
which delivers value for the poor. As a result, PSP4H convened a meeting with eleven “early adopter”
counties in early 2015 to see how best and in what areas PPPs could be pursued. PSP4H was able to
present to county health managers the different types of PPPs in order to allow for a uniform
understanding of PPP among stakeholders. PSP4H highlighted the fact that not all PPPs have to be
complex requiring extensive investments, expertise and time, some PPPs are simple, straight forward and
can deliver quick-wins; especially in the non-clinical areas. PSP4H expressed interest in working with
counties on the PPPs that can deliver quick-wins given the short duration of the programme.
Out of the eleven, two counties emerged as champions of the PPP concept: Kilifi and Kisii. Kilifi County
put forward four priority areas for possible PPPs which included: fleet management, community
midwifery, electronic medical records, catering and housekeeping. When the new County Health
Executive took office, the partners settled on community midwifery. The objectives are similar to Birth
Wise: increase in the number of skilled deliveries and enhance sustainability of affordable services to
lower income groups. The intervention in Kisii County focuses on improving customer services in Kisii’s
flagship Level 5 Teaching and Referral Hospital using a private sector customer care model. PSP4H will
conduct a baseline opinion survey and needs assessment, design and train all hospital personnel in
customer care and monitor its implementation to see if it works and can be transferred to other public
facilities.
What Works and What Doesn’t
Successes | The PPP concept, particularly for the health sector, is still widely misunderstood despite
Ministry and donor efforts to increase awareness on the topic. PSP4H,
however, managed to demystify who is private sector and what are PPPs in
health for many of the county executives with local and regional data and
examples from the region. Moreover, PSP4H was able to frame PPPs from a
management point of view which resonated with some of the county
executives.
After starting the dialogue process with eleven county executives, PSP4H concluded with only two
projects, focusing only on county executives with strong political support not only with their management
team but also with their top leadership. In Kisii County, the Governor, who strongly supports a health
agenda, personally attended the programme’s briefing with the County CEC Health and endorsed the
Memorandum of Cooperation between the County and PSP4H. Kilifi the County has shown their full
support with buy-in from the CEC’s office by appointing an officer – the County Deputy Nurse – to manage
this PPP intervention. The County Deputy Nurse always attend the partner meetings and County Head
What Works
Focusing on a county team with strong leadership and political buy-in.
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Nurse and the Director of Health Services sometimes attend. Also the County avails its facility for the
meetings with the private midwives.
Challenges | Even though PSP4H managed to develop a common understanding of what type of PPPs
will work or not work in health, the majority of County Executives still had unrealistic expectations on
PPPs. During the negotiation process, PSP4H struggled to overcome County Executives’ hopes that the
private sector will bring “free” capital to the health sector or their intention to start immediately with
complex, capital intensive PPPs without the requisite skills and funding. The most significant factor
contributing to a County Executives unrealistic outlook on PPPs is the lack of government clarity and
direction on how to implement PPPs in health, in addition to no training to build county capacity to
implement PPPs. The programme spent considerable time and efforts to manage county expectations
which delayed the start of the pilot interventions.
The Programme encountered two other implementation challenges. First, the PSP4H team struggled to
break government tradition of receiving sitting fees to attend trainings and conferences. Several counties
therefore declined to attend the PSP4H meetings. Second, MOH staff turnover created further delays in
implementation. In Kilifii, for example, the intervention manager established a good working relationship
with the Health CEC when suddenly a new one was appointed. PSP4H had to re-introduce the program to
the new CEC and seek her buy-in which delayed implementation.
3.6 GSK Asthma Products – Making Effective Asthma Treatment Affordable
Background
Asthma is one of the growing non-communicable diseases (NCDs) in Kenya
due to rapid urbanization and increased exposure to risk factors like air
pollution, tobacco smoking, and allergen exposure. Currently, asthma
affects four million Kenyans. Proper diagnosis and treatment with quality
and affordable asthma medicines is critical to reducing the disease burden.
In general medicines used to treat asthma are in two broad groups:
relievers (bronchodilators) used on an “as needed” basis to quickly reverse asthma common symptoms
and controllers (anti-inflammatory drugs) taken on daily basis to keep asthma under control. The more
effective asthma reliever medicines (bronchodilators) currently in the Kenyan market are not readily
available in a formulation and packaging affordable to the working poor.
GSK, notably known for branded innovator medicines and products that typically serve middle and higher
income earners in Kenya, launched a quick-relieving asthma medicine that caters to the low income
market (Ventolin ™ Rotacap™ capsules used with a Rotahaler™ device). Initial uptake of this product was
low; PSP4H conducted market research on asthma products to help GSK understand the low uptake of
their product and to improve access to it through a specific pro-poor marketing and distribution strategy.
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What Works and What Doesn’t
Successes | The GSK story demonstrates how a small, targeted intervention with minimal support can
be catalytic. The market research revealed Rotacap/Rotahaler market potential among low-income
segments of the population and demonstrated how the underserved
product could reach this potential target group. Findings demonstrated
that the inhalers are not as widely used as tablets and syrups among the
working poor. One of the reasons is that low-income consumers are price
sensitive to different delivery methods for asthma medicine and
consumers perceive inhalers as costly. Another reason is lack of consumer
and provider awareness on inhaled steroid/controller medicines
compared to more traditional low-cost asthma medicines such as tablets.
GSK quickly grasped not only the market potential but also how this product fits into their business model
as a leader in respiratory medicines. GSK has taken over the initiative, invested its own resources to
penetrate the low-income market with this asthma reliever medicine and formed a technical working
group to raise awareness on asthma and train health workers on proper asthma management in Kenya.
3.7 Jacaranda Maternity Services – Ensuring Quality Maternal Care in Peri-Urban Areas
Background
The overall effectiveness of a nation’s health system is strongly
reflected by the maternal and infant mortality ratios. In Kenya, the most
recent Demographic Health Survey shows evidence of improved access
to delivery facilities among urban poor communities. However, there
remain challenges in expanding maternal and newborn health services
in peri-urban areas to the poor: these communities are heterogeneous
with multiple income levels; there are different health seeking
behaviours influenced by cultural practices and aspirations; and male
partners play a major role in the family health seeking/health spending behaviours and are regarded as
decision-makers in many aspects of maternal health.
PSP4H is assisting its partner, Jacaranda Health, to increase its volume of new clients among the working
poor in its catchment areas. The intervention activities include: 1) conducting market research to better
understand the market for maternity and new born services in Jacaranda’s community and better
understand current consumer perspective on Jacaranda services, and 2) designing a marketing strategy
to boost the number of new clients as well as convert its current ANC clients to delivery care ones.
What Works and What Doesn’t
Challenges | The market study revealed that Jacaranda offers high quality health services; nevertheless,
they struggled to bring in a sufficient number of clients. The market research revealed that most of
Jacaranda clients are generally satisfied with services rendered. Nonetheless, many potential clients
stated a strong preference public facilities because of affordability and access to emergency services in
case of complications. Other reasons for low utilization included low-awareness of Jacaranda services,
What Works
Selecting a well-established health business with strong market presence as a partner can result in the partner investing its own resources to seize a market opportunity created by an intervention.
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perception that Jacaranda services are too expensive, and their initial facility was unable to handle
obstetric emergencies.
The PSP4H technical interventions focused on helping Jacaranda become
operationally and financially sustainable, including marketing campaigns
to raise awareness on its services, and break-even analysis to better
understand the needed service mix and volume levels. Although the
intervention focused on Jacaranda getting their “business model right”,
the partner instead decided to focus on securing donor funds – and they
were successful in doing so. Despite the donor funding which helped complete a new facility offering both
an operating theatre and ambulance services, which solved some previously-identified problems and
contributed to increased patient footfall, Jacaranda is still struggling to break-even. Donor funding,
although helpful in the short-term may damage Jacaranda’s long-term financial prospects and their ability
to replicate and scale up to meet growing market demand.
3.8 LABNET – A Branded Network of Quality Assured Medical Laboratories
Background
Access to reliable diagnostic testing facilities is among
the major healthcare challenges for low income earners
in Kenya. PSP4H is assisting the Association of Kenyan
Medical Laboratory Scientific Officers (AKMLSO) to
strengthen the laboratory system in Kenya by facilitating
development of a branded laboratory network called
LABNET. The business model design is drawn on
expertise learned from the formation of PHARMNET by
the Kenya Pharmaceutical Association (KPA).
What Works and What Doesn’t
Successes | LABNET quickly adopted the franchise
network model pioneered by PHARMNET and adapted it to
its member independent diagnostic laboratories. LABNET is
a signal to consumers that the member lab is qualified and
licensed; with branding in place, there is now a distinction
between licensed and non-licensed practitioners in the
market. The network is designed to be financially self-
sustaining; Sixty-five independent laboratories paid fees to
join the network in the first year.
What Doesn’t Work
Convincing a partner to focus on “getting the business model right” instead of securing donor funds is a challenge.
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Showing that the network model is both replicable and scalable, LABNET has already expanded regionally
into neighbouring East African Community countries based on demand from partner organisations in
Rwanda, Tanzania, and Uganda. A Memorandum of Understanding was executed between professional
organisations in these four countries to share the LABNET brand and
quality standards.
LABNET complements PHARMNET, the licensed, registered pharmacy
network and DOCNET, the forthcoming network of consulting physicians,
to close the loop on affordable quality primary care from the private
sector for low income Kenyans.
Challenges | LABNET’s initial marketing approach had to be changed after consumer and provider
research showed that the route to market for medical laboratories differs from that of other more
consumer-facing services such as pharmacies. Thus the marketing strategy had to be adapted to recognize
the importance of referrals as opposed to walk-in business.
3.9 PHARMNET – Increasing Access to Affordable, Quality Medicines
Background
Lower income groups in Kenya suffer from poor quality
medicines due to: 1) a highly fragmented and
inadequately regulated retail pharmacy sector; 2)
counterfeit and substandard drugs in the market
(estimated at ~30% by WHO), most of which end up at
the bottom of the pyramid; and 3) proliferation of unlicensed outlets operated by unqualified personnel.
Private drug sellers are often the first point of healthcare contact for low-income Kenyans. Currently,
consumers cannot differentiate unqualified, unlicensed outlets selling substandard medicines from
qualified, licensed outlets selling quality-assured medicines.
The PSP4H market intervention assists the Kenya Pharmaceutical
Association (KPA) to improve access to quality essential medicines
among low income groups through a branded retail pharmacy
network called PHARMNET. This commercial retail model
organizes private pharmacy owners into a network that delivers
quality medicines under a common brand. Through pooled
procurement, PHARMNET members have reliable access to
affordable, quality medicines from pre-qualified suppliers.
What Works
Network models driven by existing professional organisations are a rapid route to scale.
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What Works and What Doesn’t
Successes | The PHARMNET experience produces many successful lessons, particularly for
interventions that are start-ups. Although a start-up like Afya Poa,
PHARMNET launch did not take as long a time period because (i)
PHARMNET worked within the existing regulatory framework and did
not have to rely on any regulatory changes, and (ii) PHARMNET worked
only with licensed pharmacies and certified pharmaceutical
technologists. Even though PHARMNET is a start-up, its parent
company, KPA is a well-established organization with a sound
governance structure, human resources in place (its 7,000 members
operate 3,000 community pharmacies across Kenya), and revenue flow.
PHARMNET is an example of what works in aligning partner expectations and engaging partners
throughout implementation. The intervention manager spent considerable time up-front during the
negotiation process with KPA to ensure they understood what PSP4H
would and would not do. Also, they reached agreement early on and
clearly defined each partner’s respective roles and responsibilities, which
is embodied in the MOU. The intervention manager reinforced KPA’s
understanding of their roles and responsibilities and made sure that the
Board understood and supported the network concept and activities.
In addition, the intervention manager pro-actively communicated the project’s expectations through
several interactions: weekly meetings, professional relationships with Board members, participation in
KPA events (even those not related to PHARMNET). Finally, and mostly importantly, the intervention
manager created a culture of performance by agreeing with KPA on tangible results, tying them to key
performance indicators (KPIs), and linking KPI achievement with PSP4H support. The intervention manger
would review the data regularly with the KPA, making it part of PHARMNET’s “way of doing business”.
Similar to Birth Wise, the partner involved the government early on and throughout the implementation
process. The intervention manager helped KPA to educate key government
bodies (e.g. Pharmacy and Poison Board and county health officials) on the
benefits of using PHARMNET to leverage the Government’s enforcement
capacity, and to establish and maintain government relations. The working
relationships with MOH and county officials helped KPA address and
overcome implementation challenges as they occurred.
PHARMNET was built on a fully commercial business model to ensure
sustainability. PSP4H did not capitalize the organization; it was self-funded
with over 300 members paying franchise fees to join PHARMNET by early
2016, making it the second largest pharmacy chain in all of Africa. KPA set
up the for-profit pooled procurement company Nairobi TechPharm (NTP)
to supply PHARMNET members with medicines from quality assured
suppliers. NTP works with major pharmaceutical manufacturers and
distributors on a fully commercial basis. The incentive for the suppliers is in the volume of business offered
What Works
Tips to select a credible partner in a start-up interventions include: well-established organization, no regulatory changes required, and recognized and licensed providers and facilities.
What Works
Spend time upfront to align partner expectation with program objectives to avoid problems during implementation.
What Works
Create a culture of performance, linking KPIs to programme assistance and support.
What Works
Building commercial partnerships with businesses with similar goals in the Kenyan healthcare space
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by PHARMNET’s extensive nationwide network of pharmacies, all purchasing as one entity, and volume
brings low prices which can be passed on to cash-strapped consumers.
Further, PHARMNET partnered with global British firm Unilever to increase access to safe, clean drinking
water for low income communities through providing its pharmacies as a distribution platform for the
company’s PureIt water dispenser, with the aim of reaching a signification proportion of the population
who are affected by water-borne diseases. PHARMNET outlets often operate in communities that have
no access to safe drinking water, forcing consumers to purchase expensive bottled water in order to take
their medicine.
3.10 PSK Tunza – Pooled Procurement for Essential Medicines
Background: PSP4H’s primary research revealed that drugs are the main cost driver in a small private
health clinic’s business. These small clinics, exemplified by PS-Kenya’s TUNZA network providers, resort
to buying their supplies through the private sector yet the quality of medicines varies and prices can be
exorbitant as a result of high mark-ups in the supply chain. Pooled procurement is increasingly regarded
globally as an efficient strategy to resolve challenges of high prices, poor quality and other bottlenecks
associated with procurement and drug supply chains. For PS-Kenya network providers, pooled
procurement was seen as a way to produce benefits such as: (i) creating market power in negotiating
more reasonable prices; (ii) harmonizing dispensing and standard treatment guidelines and an essential
medicines list; and (iii) improving quality of drug supply. Currently TUNZA clinics can use Mission for
Essential Drugs Services (MEDS) services to procure quality assured medicines at favourable prices. Yet
only 22% of the 354 TUNZA clinics procure their essential medicines through MEDS despite its known
benefits.
PSP4H partnered with PS-Kenya to help increase network provider adoption of MEDS services. Activities
included: (i) assessing how TUNZA clinics procure drugs and why they decide not to work with MEDS, (ii)
raising awareness among TUNZA providers on benefits of pooled procurement, (iii) piloting MEDs pooled
procurement model to test impact on costs of medicines and prices to consumers, and (iv) scaling-up
MEDS pooled procurement to other social franchises if successful.
What Works and What Doesn’t
Challenges | The assessment revealed several reasons why TUNZA
clinics do not use MEDS to procure their drug supply. Even though
Tunza providers are aware of MED services and the benefits in
participating in a pooled procurement system, they said there are too
many barriers. There main barriers to ordering drugs and supplies
through MEDS, particularly for smaller facilities, includes: (i) too much
paperwork to register with MEDS, (ii) complicated ordering process, (iii) minimum quantity required is too
high, and (iv) MEDS does not allow small providers to purchase supplies on credit. Indeed, many TUNZA
providers can get products through their existing supplier for a lower cost than MEDS. And given TUNZA
providers their long-standing relationship with their suppliers, they offer the TUNZA providers credit. To
induce TUNZA providers to change their supplier, MEDS would have to change several aspects of their
operations, such as streamlining processes, increasing access to credit for small order, and ensuring rapid
delivery. However, what terminated this intervention was the discovery that not all TUNZA clinics had the
What Doesn’t Work
A market intervention needs to be simple, easy, or have some financial benefit for a private provider to adopt it.
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proper regulatory authorization and licenses to dispense the full range of medicines offered through
MEDS, and it was unlikely that they all could be brought into the proper regulatory position even if the
business problems with MEDS were solved.
3.11 Tanaka Nursing Home – Generating Demand to Increase Patient Volume
Background: Private hospitals, particularly those serving the mass market, are frequently under-
utilized and carry excess capacity even if they offer quality services at affordable prices. These hospitals
struggle to create sufficient demand (volume) to recoup costs, much less earn a profit. Yet at the same
time, many neighboring public hospitals are congested with too many patients and cannot keep up with
demand. To address this problem, the private Tanaka Nursing Home (TNH) sought to identify effective
demand generation strategies to gain operational efficiencies while maintaining quality care and
affordability for the low-income rural population in its Busia catchment. As the PSP4H India literature
review demonstrates (Understanding the India Low-Cost Model of Healthcare Delivery: A Review of the
Literature), boosting patient volume while aggressively managing costs is an effective approach to deliver
quality services while maintaining affordability.
To reach the mass market, TNH designed an outreach programme focused on areas in and around Busia
where substantial numbers of the target population reside or work. The outreach programme’s objective
was to create awareness among the target group that TNH services are accessible, affordable, and high
quality. TNH staff and volunteers conducted outreach activities in the community, providing basic health
checks as a way to promote their hospital and connect awareness to subsequent visits to TNH.
What Works and What Doesn’t
Successes | The PSP4H comparative markets study (A Comparative Analysis of Health Markets and
Private for-Profit, Pro-Poor Interventions in East Africa) concluded that
innovative and non-traditional marketing strategies work best for low
income earners. TNH further substantiated the study’s finding through
TNH’s experiment with community outreach and confirmed that
innovative and creative marketing are needed to reach this often
misunderstood and poorly researched population group. Community
outreach, along with health camps and other educational activities, work with this target group given low
knowledge levels on health issues and service availability. Moreover, personal contact supported with a
regular one-on-one communication is critical to the non-traditional marketing approaches and is more
likely to capture customers and bring them into a health facility like TNH. The intervention also found that
information and communication through multiple channels to prospective clients about available services
enables the consumer make an informed decision on where to seek healthcare and can change
perceptions influenced by socio-cultural issues.
What Works
Innovative and non-traditional marketing approaches, including one-on-one follow up, works best the poor.
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Challenges | TNH is a victim of its own success. Demand has increased by 60%. Waiting time has
increased from 5 to 10 minutes to 45 to 60 minutes. However, neither the intervention nor TNH
anticipated the infrastructure and staffing needs required to respond to
this increase in patient flow. As a result, TNH did not set aside funds or
budget for the added costs associated with increased staff, equipment
purchases and infrastructure upgrades. Moreover, TNH has plans to
institutionalize and pay for the community outreach programme to
sustain patient flow but will not be able to do so until they have
sufficient cash flow.
3.12 Viva Afya (now Live Well) – Increasing Access to the Proper Path to
Treatment
PSP4H designed a market intervention with Viva Afya to encourage clinical
consultations by cash-conscious low income consumers – who are
conditioned to self-diagnosis and often go straight to the drug seller – and
increase the overall number of footfalls across five pilot clinics. The
intervention tested three marketing approaches:
(1) Referral Program – Every customer who refers a new customer to Viva
Afya gets a discount off their next bill while the new customer gets a free consultation.
(2) Family Loyalty Program – Family members seeking consultation receive progressively increasing
discounts to encourage loyalty and return visits.
(3) Fixed Price for Bundled Services – Children under five years receive medical consultation, basic
medicines and laboratory tests for a fixed price.
All Viva Afya primary care clinics provide consultations, laboratory and pharmacy services, an affordable
“proper path to treatment” under one roof. Over the past six months, the number of transactions per
service line has been recorded to demonstrate changes in access to quality care, tracking both
consultations and the overall number of transactions. By 2016, Live Well purchased Viva Afya; however,
this intervention will be continued to be referred to as Viva Afya for purposes of this report.
What Works and What Doesn’t
Successes | Viva Afya is a good example of a targeted intervention designed to help a private health
business get their business model right. The intervention was well-
designed, realistic given the short-time frame and focused on learning
one thing – how to increase consultations and overall client volume
(footfall). The partner clearly understood the intervention’s objective
and partner responsibility, and as result, the partner provided the
monthly data on the service lines and footfalls.
The results from the six-month pilot showed the marketing tests
reinforced existing behaviors and did not create new ones. In pilot clinics
where consultations made up a significant portion of their overall
transactions, consultations further increased. For example, the Masimba clinic running the loyalty
program where consultations constituted approximately one-fifth of their transactions, the test boosted
What Works
A “quick intervention” model that proceeds to test marketing based on existing knowledge and a sound hypothesis can be just as effective – and more cost effective – than a traditional intervention based on months of research prior to action.
What Doesn’t Work
Did not plan for added costs associated with increased demand and patient flow. Funding may hinder expansion.
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consultations by 20% and overall sales by an average of 6%. While, the Embakasi clinic running the referral
program where consultations made up one-quarter of their transactions, the test boosted their
consultation by 20% and overall sales by an average of 9%. The results also showed an aggressive
marketing component within the catchment area is necessary to encourage uptake amongst new
customers and to create a change in existing consumer behaviors.
Challenges | The results highlighted the fact that there were
extraneous variables that significantly affected test uptake but were not
controlled during the pilot. They included clinic management, staff buy-in
and catchment population profile. Some of the clinics experienced
turnover of key staff during the pilot which affected the test uptake while
in other clinics, the staff did not support the promotional strategies which
reflected in poor uptake. Given staff-turn over both at the management and provider levels, it is critical
to reinforce buy-in throughout the pilot period. And finally, clinics that were in more residential areas as
opposed to clinics that had more transient catchment populations, showed a higher uptake of tests.
What Doesn’t Work
It was difficult to maintain management and staff buy-in during the pilot because of staff turnover.
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4 LESSONS LEARNED
Based on successes and failures in implementing market-based action research in
healthcare, PSP4H lessons can be applied in future healthcare programming
Over its lifespan, the PSP4H programme documented its implementation processes, tools and outcomes
in order to share experiences with other development practitioners and learn about the market systems
approach as it applies to health. This section adds to the knowledge on PSP4H’s lessons from
implementing market interventions in healthcare which were initially documented in two previous
monographs – A Comparative Analysis of Health Markets and Private For-Profit, Pro-Poor Interventions in
East Africa (December 2014) and Lessons Learnt by the Private Sector Innovation Programme for Health
(PSP4H) – Midterm Report (June 2015).
This is not a comprehensive inventory of lessons learned, but rather a commentary on incremental lessons
that have become much more clear based on analyzing actual intervention successes and failures – what
works and what doesn’t.
4.1 Some selection criteria are more important than others
The PSP4H team systematically used the tools and criteria in its R-I-E-D (Relevance-Impact-Engagement-
Do No Harm) model to select its intervention partners. The tools were effective in screening out
inappropriate partners as well as guiding the team towards “winning partners”. Experience, however,
revealed there are some s criteria that should be given more weight during the selection process, helping
to avoid common pitfalls and implementation challenges. They include: (i) degree of partner
understanding of and alignment with the M4P approach, (ii) partner(s) already working the poor, and (iii)
partner leadership (e.g. Board and management) strongly supportive of and are committed to the
intervention. As the discussion of the interventions demonstrated, these factors can either “make or
break” an intervention’s success.
4.2 Align partner expectation with M4P principles
The PSP4H team quickly realized that the M4P approach is not widely understood in the health sector.
Although an earlier PSP4H policy brief helped explain what a M4P project will and will not do, the team
still spent considerable time explaining to donors, government officials and potential intervention
partners how M4P is different from a traditional donor programming. A significant portion of the
intervention managers shared how few of their intervention partners truly understood the M4P approach
(e.g., Birth Wise, Jacaranda, county health executives). In fact, several partnerships failed, were
abandoned, or never got off the ground because the partners continued to harbor expectations that the
program would give them direct funding or donate commodities or equipment. There are some measures
a M4P program can take to better manage partner expectations: (i) strengthen MOU’s provision on
mission, and roles and responsibilities to better align partner expectations, (ii) invest ample time upfront
in the process to ensure that the partner and program goals are aligned, and (iii) manage partner
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expectations through various mechanisms, such as explicit discussions during negotiations,
weekly/monthly meetings, clear and simple KPIs and quarterly performance reviews.
4.3 Network of networks is an effective strategy to reach scale
Future M4P programmes should focus on partnering with networks for several reasons: (i) a network has
already aggregated several similar providers into one entity, making it easier to implement an
intervention; (ii) multiple partner networks facilitate knowledge and skills transfer, for example enabling
the BST intervention to access hundreds of PHPs; (iii) linkages between network partners (e.g. Viva Afya
with Pharmnet, LABNET Kenya with LABNET Uganda) can scale interventions effectively and quickly; and
(iv) networks overlap and can support each other (DOCNET-LABNET-PHARMNET on the supply/provider
side and Afya Poa on the demand/payer side) . Network effects are a route to scale and PSP4H experience
in the reach provided by overlapping healthcare networks deserves to be more fully explored as an
effective and VFM alternative to the conventional ‘pilot and scale up’ model that is commonplace but
seldom actually achieves the desired scale.
4.4 Intervention strategies can break the culture of dependency
Ten years ago when donors were beginning to explore how to work with the private health sector, PHPs
would directly tell donors that they did not need donor support. Now, private, commercial providers have
become accustomed, and in many cases, expect donor subsidies. While on the other hand, government
officials expect “sitting fees” to participate in workshops and trainings. It has been an uphill battle for
PSP4H to break this culture of dependency with both public and private sector partners. In the case of
BST, the intervention manager was able to break this cycle by clearly demonstrating the value of BST to
PHPs and in fact, has been able to get PHPs to pay for the training. In the case of PHARMNET, the
intervention manager was able to create a culture of performance in which KPA received certain key
inputs from PSP4H, such as market research, technical assistance, BST, etc. only upon completion of KPIs.
4.5 There is no “right” length of time for interventions
The PSP4H portfolio has a number of short, targeted interventions as well as several long, comprehensive
ones. A market intervention can be minimal yet catalytic when working with a well-established, mature
healthcare business. In the case of GSK, with strong market presence, was able to use its own resources
to size market opportunities identified by PSP4H; while other interventions can be focused on a key aspect
of the business model, such as marketing strategies that can drive footfall, to spur a private provider to
expand his/her to low income earners as new business model like City Eye, Jacaranda, TNH and Viva Afya.
Moreover, the cumulative learning from these focused interventions has created a body of knowledge on
what works and does not work in marketing to this lower income consumer group.
Timeframes are related to the complexity of the intervention as well as potential market impact. In the
case of the shorter, more targeted market interventions, they usually focus on a single provider and their
ability to: (i) improve services, (ii) better target the working poor and/or (iii) become more financially
viable. But even these interventions take time to put into place new strategies that will attract sufficient
patient volume to break even and become financially viable when serving the poor.
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In the case of the more complicated market interventions, they usually involve more than one provider
and/or reach large numbers of consumers. These market interventions, although more time consuming,
have greater potential of be transformative and shaping a specific markets or system if given enough time.
Indeed, the PSP4H programme’s three-year cradle-to-grave timeframe is too short for such ambitious but
transformative interventions like Afya Poa and Pharmnet. Moreover, the programme is not long enough
to build evidence on the intervention’s system impact and possibly health outcomes. Most M4P
programmes run five to seven years.
4.6 Balancing quality with business model – is there a trade-off?
Another challenge for the interventions has been keeping a partner’s focus on the bottom line. Some
partners, such as Birth Wise and Jacaranda, tend to focus more on delivering services and improving
quality and not enough on running their practice as a business. Although the starting point is better
marketing to attract more clients, few conducted the type of analysis needed (e.g. costing studies,
benchmarking prices, efficiency studies) to employ cost-saving measures used by other low-cost, high
quality services. Going forward, a market-based health programme will need to balance partner activities
that focus on quality with getting the business model right.
There are several best practices that pro-poor private providers use to become financially solvent
(summarized in PSP4H Policy Brief No. 13 – Key Factors in Low Cost Healthcare Delivery) such as
specializing in a limited menu of services (e.g. eye care, cataract surgery, diagnostics), consistently looking
for ways to cut costs (e.g. economies of scale, bulk purchasing, task shifting), keeping overheads low and
shifting tasks to lower level health cadres. In addition, a future market systems health programme can
also involve government through PPPs to bring in more footfall (e.g. establishing referral system) and to
finance private services (e.g. contracting, vouchers, social health insurance) to remove the poor’s
economic barriers.
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5 CONCLUSIONS
The PSP4H programme expanded knowledge and experience on applying market
based approaches in health
The PSP4H programme pushed the frontier on market based approaches by applying and adapting M4P
methodologies in the health sector. The team experimented in different areas: in tools and
methodologies, in different markets and systems, and with different types of private health providers. In
two and half years, the programme has learned important lessons that can be applied in forthcoming M4P
health programmes in other emerging economies.
Although the programme learned and documented many interesting lessons in a short period of time (2
½ years), a market-based programme needs more time. PSP4H has successfully launched market
interventions that are beginning to show promise and in some cases, results. But PSP4H partners need
more time to act of the programme’s recommendations strengthening their business model and several
business cycles to see if they can operate independently of programme support and are indeed on the
path towards financially viability. Moreover, the interventions need more time for the programme to
evaluate and document whether the interventions will produce their intended health results – delivering
quality health services and products that are affordable for low income earners.
PSP4H is optimistic that its experience will prompt others – international donors, international health
experts and practitioners, and government – to apply market based approaches to influence health
markets and harness private sector capacity to deliver pro-poor health services. Moving forward, future
health market-based programmes can build on PSP4H’s experience, apply PSP4H’s recommendations to
implementation so more interventions will be successful and to foster continued learning on how to apply
market systems approaches in health.