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Successes and Failures in Health Market System Interventions: Learnings from PSP4H in Kenya

31st March 2016 Cardno Emerging Markets i


Private Sector Innovation Programme for Health (PSP4H) Private Sector Innovation Programme for Health (PSP4H)

Prepared for

Department for International Development (DFID)

March 2016


Private Sector Innovation Programme for Health (PSP4H) Private Sector Innovation Programme for Health (PSP4H)


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:


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


31st March 2016 Cardno Emerging Markets iv


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


31st March 2016 Cardno Emerging Markets v


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


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


31st March 2016 Cardno Emerging Markets vi


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.


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.


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

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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.



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.



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


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



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


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


branding



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


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




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




Complements existing licensed, registered pharmacy

network and forthcoming physician network to close

the loop on affordable quality primary care for low

income consumers


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


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

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.



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



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.


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.



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.




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



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.


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.



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.


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.



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.




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.


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.



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).


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.



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.




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



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.


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.



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.


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.



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.


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.



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.



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



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.



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.



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.