An Assessment of the purchasing arrangements of an employer in-house managed scheme: a case study of AAR Healthcare
Date
2019
Authors
Mwaura, Njeri Lilian
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
Kenya has made a commitment to achieve Universal Health Coverage (UHC) by 2022. The country is undertaking health financing reforms that will set it on the path to achieving this goal. While health financing reforms have typically focused on the resource generation and pooling function of the health system, there is increasing recognition of the importance of the purchasing function of the health financing system. Purchasing refers to the transfer of pooled funds to healthcare providers in exchange for healthcare services provided to citizens. Purchasing could either be passive, which means merely paying bills, or strategic, which means structured to enhance the health system goals of equity, efficiency, and quality. Healthcare purchasing in Kenya is carried out by 5 main entities namely 1) the national hospital insurance fund (NHIF), 2) the county health systems 3) private health insurance 4) community-based health insurance schemes, and 5) employer in-house medical schemes. Previous studies done in Kenya has assessed the purchasing arrangements of the first 4. There is however not study that has examined the purchasing arrangements of employer in-house medical schemes. To fill this knowledge gap, this proposed study examined the purchasing arrangements of employer in house schemes in Kenya. Specifically, the study used a qualitative case study approach to examine the extent to which the purchasing arrangements of the AAR in-house medical scheme are strategic. This study employed the conceptual framework developed by the Resilient and Responsive Health Systems (RESYST) consortium to examine the purchasing actions of the AAR medical scheme across the three purchasing relationships, namely purchaser-government, purchasing-providers, and purchasing-citizens. Data was collected through a combination of in depth interviews and document reviews Respondents for the in-depth interviews were selected purposively to get individuals with in-depth knowledge of scheme. Relevant documents that contain information on the scheme were also obtained and analysed. Qualitative data was audio recorded, transcribed, importeded to NVIVO software, and analysed using a thematic approach. It was evidenced, by the findings put forward in this section that the purchasing mechanism in AAR Healthcare is passive as characterized by arbitrary fun allocation to the in-house scheme and nominal sourcing of providers. There was no evidence of strategic purchasing with regard to the acquisition or distribution of financing in the service provision process. The process was however deemed effective by all users. With regard to the second objective, it was evident that AAR Healthcare did not feature a specific purchasing entity as the purchasing functions were distributed between the HR, Procurement and Finance department. This therefore rendered the relationship between the purchaser and the other entities- citizens (employees), government and providers- as fragmented and uncharacterized; the system was essentially run as in-house health benefit scheme with the exception of contracted services given that the organization provided health services, such services were mainly sought in-house as opposed to through contracts with other providers. The main recommendation forthcoming from this study is that AAR Healthcare should consider a switch to strategic purchasing in effecting its healthcare provision function to employees. In achieving these, it will be necessary to first and foremost institute a designated purchaser for the fund; one that would be charged with orchestrating all functions involved with other actors in the purchasing function. Findings from this study can also be used to prescribe possible purchasing arrangements for employer managed schemes.
Description
Submitted in partial fulfillment for requirement for the award of degree of Master's in Business Administration in Healthcare Management (MBA-HCM)