Funded by

The Private Sector Innovation Programme for Health (PSP4H)

Exploring the Future of Healthcare Programming

Funded by

Kenya Medical Association Symposium - Realigning Healthcare as a BusinessRon Ashkin, PSP4H Team Leader

Nairobi

17th November 2015

Funded by

Karibu

Welcome

Thank you for your invitation. We are delighted to have KMA as our partner in improving Kenya’s healthcare system.

Funded by

What is The Private Sector Innovation Programme for Health (PSP4H)?

• A three-year action research project (2013-2016) funded by the UK Government’s Department for International Development (DFID) to explore the markets in which poor people pay for-profit providers for healthcare

• DFID is the UK Government’s international development agency whose primary mandate is reducing poverty

• PSP4H exists “to improve the for-profit health market in Kenya, so that poor people get better value for money they spend on health”

Funded by

Pro-PoorPrivate Sector

For Profit

PSP4H

Funded by

Public Sector Health Care

Delivery

Public-Private Partnerships

Private Sector Health Care

Delivery

Who Does? Who Pays?

Public Sector

Public Sector

Private Sector

Public Sector

Private Sector

Private Sector

M4P

Funded by

The Private Sector Innovation Programme for Health (PSP4H)

• PSP4H’s primary target group is low income consumers, primarily informally-employed daily wage earners, who pay out-of-pocket for healthcare

• The project partners with private sector organizations like KMA to identify and pilot innovative approaches, and scale them up if they are successful and viable

• PSP4H encourages the private sector to invest its own money to provide healthcare services to the target group (we are a consulting firm, we don’t give money)

• Evidence and lessons learned are documented and shared on www.psp4h.com

Funded by

The Kenyan Population Pyramid, as Seen by Business

45%Cannot Pay

50%Can Pay Less

5%Can Pay

Health Care Consumers

Current Market

Opportunity to reach 22 million

Funded by

• 83.3% of employment in Kenya is informal (e.g., juakali)• This group is largely uninsured (single digits)• These consumers have small amounts of disposable income

(est. 100–300 Ksh/day); most pay out-of-pocket for healthcare• 62% of healthcare spending in Kenya is in the private sector• 76% of private sector healthcare spending is out-of-pocket• Ergo 47% of total healthcare spending in Kenya is out-of-pocket• This burden disproportionately falls on low income groups

• The working poor often do not receive value for money in health care – “The Poverty Penalty”

From Our Research: Who is the Target Group?

Funded by

The Poverty PenaltyThe working poor often do not receive value for money in healthcare

Funded by

Why are For-Profit Private Healthcare Businesses Interested in Serving Low Income Consumers?

• For-profit private healthcare businesses have an imperative to grow – growth is not an option

• However, in many cases, their current market is limited • Only 5% – 7% of the population has clear ability to pay• This “top end” is becoming saturated

• Businesses can expand their customer base by going “down market” as a mainstream strategy• As shown, low income Kenyans already pay out-of-pocket for

health care – the money is there• At 83.3% of employment, our target is actually the MASS MARKET

• Businesses that understand this will thrive

Funded by

The Gap

The Business

Imperative to Grow by Expanding

Downmarket

£ £ £ £ £ The

Investment Funds to

Fuel Growth £ £ £ £ £

WHAT BUSINESS MODEL???

Action research by PSP4H fills the gap

Funded by

Network of Licensed Pharmacies: KPA Pharmnet

• A commercial retail model that organizes independent private pharmacies owned by registered Kenya Pharmaceutical Association members into a network under a common brand – over 300 members

• With access to reliable and affordable essential medicines from quality assured suppliers

Funded by

Network of Diagnostic Laboratories – AKMLSO Labnet

• Access to reliable diagnostic testing facilities is among the major challenges in Kenya

• PSP4H is working with Association of Kenya Medical Laboratory Scientific Officers (AKMLSO) to strengthen the laboratory system in Kenya through development of a branded laboratory network called Labnet

Funded by

Observations and Initial Lessons

• Partner engagement is key• Go with existing organizations and support early

adopters like KPA, AKLMSO, KMA• As opposed to creating initiatives and convincing partners

• Leverage these networks• Networks overlap – enable proper path to treatment• Network effects are key to scale – reaching the mass

market

• Leverage existing human resources• Leverage existing regulatory framework

Funded by

What is the Market Problem in Healthcare?

• Poor access to quality healthcare due to: • No consumer distinction between qualified and unqualified

providers• No clear consumer distinction between levels of care• Widespread consumer habit of self-diagnosis• Unqualified/unlicensed personnel• Highly fragmented sector• Lack of consumer trust• High markups and inconsistent pricing

Funded by

The Solution

• A clearly identifiable place to access quality healthcare at an affordable price - franchise networking strategy:• Organizes the independent physicians `market• Causes change for the better• Signals quality to consumers• Edges out substandard market players

• A branded KMA network offers opportunities for:• Standardizing quality• Mitigating unfair competition from unqualified market players• Value for money to consumers• Overall better health outcomes

Funded by

Benefits of Network Membership

• A unifying logo and brand• Symbol of quality that enhances consumer brand loyalty

• Training in business skills• Fill a knowledge gap not currently covered

• Quality manual and checklist• Adherence to mutual high quality standards

• Pooled procurement• Bulk purchase discounts where applicable

• Demand creation• Consumer awareness of the proper path to treatment

• Peer networking and supervision

Funded by

What’s Next for KMA?

• Strategic planning with KMA• Identification of market problems and opportunities

• Establishment of KMA branded network• Recruitment of members to network

• Creation of member services portfolio • Branding

• Creating logo and brand identity

• Creation of quality assurance programme• Training and capacity building

Funded by

Internet and Social Media

Check out our Web Site – The M4P in Health Portal

(research reports and briefs are freely downloadable):

www.psp4h.com or www.m4pinhealth.com

Join our LinkedIn Group ‘M4P in Health’:

https://www.linkedin.com/groups/M4P-in-Health-7449657

Follow us on Twitter:

@psp4h