Innovative financing for universal health care
A new report on innovative health financing to achieve universal health coverage (UHC) in Kenya was launched at the Sankalp Africa Summit by the SDG Partnership Platform, in partnership with Intellecap.
It highlights the need for government to continue to significantly increase its budgets for health to deliver on the ambition to realize UHC, while it taps into complementary sources of financing to optimize the existing resources and bridge critical gaps.
The paper identifies various promising health financing models that can help Kenya generate investments towards achieving UHC.
1. Social Impact Bonds (SIBs)which can improve the efficiency of government healthcare spending at the county as well as national levels and facilitate result oriented programmatic funding and support. These models help to fund healthcare through contracts where private investors provide upfront flexible funding to healthcare providers and outcome funders (government or development partners) repay these investors based on the healthcare outcomes achieved.
2. Advance Market Commitmentsthat guarantees product providers a long-term market and price. Under this arrangement, a financier will guarantee to purchase a large amount of the product for a set price, if the product can meet their requirements. This reduces the risk for those developing new medicines, medical devices, technology solutions or other products and enables them to leverage economies of scale from a large order.
3. Asset Lease Financingis a type of a direct financing to procure medical equipment and other tangible assets such as ICT used in healthcare service delivery. Instead of incurring an up-front cost, the cost is spread over several years. This enables the immediate delivery of the products even if all the funding is not entirely available. Contracts can be structured so payments are dependent on the product use, maintenance, upgrades and also training for users which can improve utilization of the asset.
The SDG Partnership Platform is a high-level collaboration between the Government of Kenya, the UN and other stakeholders. The Government of Kenya is committed to implementing UHC to ensure that everyone has access to the quality essential health services without suffering undue financial hardship.
Speaking at the launch of the report at the Sankalp Conference in Nairobi, Arif Neky, SDG Partnership Platform Coordinator, said they are committed to helping Kenya accelerate the attainment of the SDGs through partnerships that catalyse investments and innovations.
Read Also: The man in the driving seat of NHIF reforms
Mr Adam Lane, Senior Director of Public Affairs at Huawei, one of the private sector partners of the Platform supporting the paper, explained that new financing models not only unlock new forms of capital, but bring other benefits such as aligning incentives between different stakeholders in the health system, improving efficiency of health service delivery, and tapping into new forms of expertise.
“We have seen how innovative financing has transformed other sectors such as solar energy and now healthcare also needs to explore these opportunities,” said Mr Lane. “M-Kopa alone has raised over US$150m for their model which is a variation on asset lease financing allowing more than 500,000 households to use mobile money to pay for solar energy systems, smart phones, stoves and TVs in installments.”