Connecting private providers to health financing programs through contracting and digitization

Financing for private provision of care is critical to expand health services while reducing financial barriers to make access more equitable. In a newly released brief, SHOPS Plus presents lessons from work in Kenya that shed light on how digitization can support small private health providers serving low-income populations to enter into contracts with health insurance schemes, reducing financial barriers for those seeking care.

Health facilities: going digital and contracting with insurance schemes

AFYA Koa graphic with a family and a title that reads, Affordable Medical cover for you and familyThe project conducted two related activities working in collaboration with PS Kenya, an affiliate of PSI. Both activities aimed to help providers transition from collecting cash payments, that often cause clients financial hardship, to new sources of revenue from prepaid, pooled funds via contracts with health insurance schemes.

In one activity, PS Kenya focused on digitizing clinical and administrative data of 33 high-performing small to medium-sized practices in its 415-member Tunza social franchise network. These practices deliver family planning and other essential primary health care to underserved populations. In another activity, it acted as an intermediary, representing this network of select providers in seeking contracts with Kenya’s National Hospital Insurance Fund (NHIF) and private health insurers.

More to learn about digitization and contracting through an intermediary

A primary barrier to contracting in Kenya is that the NHIF is currently prohibited by law from purchasing health services through an intermediary that represents multiple private providers. The NHIF would need legal reform before it could contract with an intermediary representing individual providers. After confirming this limitation of the NHIF, PS Kenya executed its first contract with a commercial insurance scheme for a new outpatient product targeting low-income households called AfyaPoa—Amani. Contracting with a private insurer yielded lessons on how an intermediary may be able to support more efficient and scaled contracting with providers and payors, including, if future reforms permit, the NHIF. For example, the private insurer reported that the process of contracting through PS Kenya was positive. Working with an intermediary allowed it to identify, recruit, and train providers more efficiently than if it had contracted directly with individual providers.

Reflecting on this work, Mbogo Bunyi, senior private sector advisor on SHOPS Plus and an author of the brief, noted, “Small and medium private providers are embedded in our communities and a first point of care for many. Aggregator contracting with digitization offers a key pathway to scale efficiently and standardize the quality of care.”

This experience also underscored important expectations of payors to work with an intermediary. Payors will require that the intermediary has legal authority to represent network members for all terms and conditions in the contract, including payment methods and rates. They want assurance that an intermediary has operational capacity and systems to conduct financial and non-financial transactions with the payor on behalf of network providers. They also look for a common fee schedule across the network.

For private providers, this experience highlighted opportunities and pitfalls of transitioning from paper, cash-based operations and limited numbers of individual contracts with payers, to digital clinical management systems and working through intermediaries to participate in purchasing arrangements. It showed that greater use of digital systems can support providers to contract with health financing programs that reduce financial barriers for clients, submit claims and receive payments electronically, and manage patient information. However, they require investment, technical support, and a willingness to do things differently.

For more, read the brief.

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Sustaining Health Outcomes through the Private Sector (SHOPS) Plus is a five-year cooperative agreement (AID-OAA-A-15-00067) funded by the United States Agency for International Development (USAID). This website is made possible by the generous support of the American people through USAID. The information provided on this website is not official U.S. government information and does not represent the views or positions of USAID or the U.S. government.

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