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Advances in Social Sciences Research Journal – Vol. 8, No. 9

Publication Date: September 25, 2021

DOI:10.14738/assrj.89.10841. Nasieku, T., & Munyoki, M. (2021). Public-Private Partnerships and the Healthcare Sector Performance in Kenya. Advances in Social

Sciences Research Journal, 8(9). 339-362.

Services for Science and Education – United Kingdom

Public-Private Partnerships and the Healthcare Sector

Performance in Kenya

Tabitha Nasieku

Jomo Kenyatta University of Agriculture and Technology

Michael Munyoki

Jomo Kenyatta University of Agriculture and Technology

ABSTRACT

Healthcare is one of the fundamental development agenda to any nation and its

adequate provision in an accessible, quality and sustainable manner is the supreme

responsibility of the state. However, the burden of healthcare cannot be met by the

government alone, but requires substantial investment from the private sector as

well. This article reviews the existing empirical literature to examine the

contribution of private investment on the healthcare sector performance in Kenya.

Existing evidence shows that there is minimal private-public partnership in the

health sector in Kenya. The main factors inhibiting private-public partnership

investment in the sector were attributed to the uncertainty associated with

universal healthcare. Further, the scheme is characterised by an overall lack of

transparency and accountability surrounding contracts, costing and allocations

with many of the safeguards against these kinds of challenges blatantly ignored by

several actors and in turn raising issues of accessibility for citizens. Also, private

sector credit and political regimes have a negative but significant influence on

private investments generally.

Keywords: Universal Healthcare, Public-Private Partnerships, Performance

INTRODUCTION

Healthcare is one of the fundamental developmental agenda to any nation and its adequate

provision in an accessible, quality and sustainable manner is the supreme responsibility of the

state [1]. Towards this objective, several countries globally developed and developing have

been on healthcare reform trajectories in the past few decades. Kenya’s public healthcare

system has been on an evolutionary journey for close to seven decades now characterized by

reforms and investments in a bid to improve the health profile of its citizens [2]. The Kenyan

healthcare system can be split into three subsystems, being the Public Sector, Commercial

Private Sector, and Faith Based Organizations (FBOs). The Public Sector is the largest in terms

of the number of healthcare facilities, followed by the Commercial Private Sector and the FBOs

[3]. There is a large disparity among these health facilities, especially in rural areas.

The health sector in Kenya relies on several sources of funding: public (government), private

firms, households and donors (including faith based organizations and NGOs) as well as health

insurance schemes [4]. Unfortunately, limitations in implementing an overall healthcare

financing strategy has hindered effective planning, budgeting and provision of health services.

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Advances in Social Sciences Research Journal (ASSRJ) Vol. 8, Issue 9, September-2021

Services for Science and Education – United Kingdom

The health system has also struggled with stagnant or declining budgets for health, system

inefficiencies, persistently poor service quality and lack of equity [5]. Future planning needs to

recognize that “reversing the trends” cannot be achieved by the government health sector

alone. Active involvement and partnership with other stakeholders in the provision of care

should be intensified.

According to a report by the Netherlands Enterprise Agency (RVO) [6], the Kenyan private

healthcare industry was ripe for investment given the growing middle class together with the

economy and the attendant demand for quality and affordable healthcare. However, provision

of quality and affordable healthcare has been limited by lack of adequate healthcare coverage

and infrastructure as well as a limited health insurance coverage [6]. This has been a limiting

factor for investors eying the Kenyan healthcare market. However, with the introduction of the

Universal Healthcare Coverage (UHC) under the current Government’s Big Four Agenda higher

subscription rates to public health insurance is expected to increase.

Universal Health Coverage (UHC) is a critical component of sustainable development and

poverty reduction, and a key element of any effort to reduce social inequities for shared

prosperity of any nation. It is based on the principle that all individuals and communities should

have access to quality, essential health services without suffering financial hardship. According

to Greer and Méndez [7], Universal Health Care Coverage is described as making certain that

everyone has access to the required health services which includes, palliation, rehabilitation,

treatment, promotion and prevention, of effective sufficient quality while also making sure that

the users of these services are not exposed to financial hardships. Tsimtsiou [8] explains that

universal health coverage, universal coverage and universal health care are the various

terminologies that have been used to describe to the same concept. Kruk et al., [9] stated that

universal health coverage is frequently used to refer to reforms within the health care systems

in middle and low income countries.

Under the UHC scheme of which the Kenya government largely delivers through the NHIF, both

public and private sector healthcare service providers are eligible for enrollment with the

scheme and as such get remittances from the fund [3]. However, the key question remains as to

whether the introduction of the UHC is stimulating investments in the private healthcare sector

in the country and what are the implications for this development.

The need for public - private partnerships arose against the backdrop of inadequacies on the

part of the public sector to provide public good on their own, in an efficient and effective

manner owing to lack of resources and management issues. In the US, Public Private

Partnerships have been explored as a mechanism through which additional resources and

support can be mobilized for health activities, particularly in under resourced developing

countries [10]. Involvement of the private sector in China is linked to the wider belief that public

sector bureaucracies are inefficient and unresponsive and that market mechanisms will

promote efficiency and ensure cost effective, good quality services [11]. Eschenfelder [12]

argues that the advantages of PPP include the incorporation of the private sector’s capital and

expertise, the facilitation of conditions for a life cycle optimization of the project, a more

customer-oriented service, and the development of new business opportunities. The most

relevant disadvantages include higher financial and transaction costs, the negative public

perception of tolls, and the complex contractual structure. The most typical example of PPP