Rose Weeks

What’s Hindering the Growth of Health Businesses in Ghana and Kenya

In a series of new studies for the World Bank’s Health in Africa series, the authors look at public-private sector collaboration from the perspective of health firms. Building on the comprehensive engagement framework laid out in the team’s Healthy Partnerships report, covered earlier on NextBillion, one paper focused on health firms’ perspectives on their interactions with government. The vast majority of health facilities surveyed received no government assistance in meeting public health goals. In addition, governments neglected the vast range of health services offered through pharmacies, often the first point of care for poorer families.

A new paper focuses on constraints to growth among private health firms in Ghana and Kenya.

I spoke with lead author Nicholas Burger, an economist at the nonprofit RAND Corporation, about the study’s findings: What hinders growth and how expanded engagement between the public and private health sectors could strengthen health care in Africa.

Rose Reis: Why look at constraints to growth in health firms?

Nicholas Burger: This work builds on Enterprise surveys that the World Bank conducts across many countries. These surveys don’t include health—they focus primarily on SME manufacturing facilities—but the private-sector entities in health can face the same constraints that retail sellers or manufacturers encounter in these countries.

RR: Why the focus on Ghana and Kenya?

NB (pictured left): Ghana was obvious because R4D did a census of health facilities that we could use as a sample frame. Kenya was an appealing choice because we could partner with KEMRI-Wellcome Trust, which has extensive experience with health care in Kenya, and because it fit well with the Health in Africa’s initiative’s goals.

RR: What are the major obstacles that health facilities and pharmacies face in providing good quality care to people of varying socioeconomic levels?

NB: The study didn’t measure specifically how well facilities were providing care to people of different socioeconomic levels. We focused on challenges around operating your business, believing that if you can’t operate your facility ideally you can’t fully serve your population.

Facilities reported access to finance as a major barrier–in both Ghana and Kenya, including clinics, pharmacies and chemical sellers, which are smaller shops selling nonprescription drugs.

Why is this a problem? Managers need to be able to make major investments to expand their business: buy new equipment, upgrade facilities, hire new staff, expand their facility. If you don’t have cash on hand or access to new sources of finance, you can’t do these things. Managers typically don’t have a lot of savings and assets they can rely on to get credit. Some pharmacies seemed to be getting a line of credit from their suppliers. Other facility managers borrowed from friends and family.

RR: Did political instability and corruption hinder growth?

NB: Political instability did not factor in our survey responses in Ghana. But in Kenya, about 10 percent of facilities said corruption was the most significant barrier. Other respondents in Kenya said crime or corruption were problems—pharmacies more so probably because they are smaller and more susceptible to crime, and have less leverage when it comes to corruption.

RR: ‘Command and control’ via inspections was often reported as the primary way health business owners encountered government. Is this a problem?

NB: My impression is that there is an assumption that public facilities provide better care, so some in government believe we need to “come down hard” on the private sector.

I think it’s about expanding other types of public-private interactions.

The Healthy Partnerships engagement paper highlights that governments lack information about what the private sector is doing. Private facilities in most countries are not required to report their activities. Yet this is pretty key information if you’re a policy maker trying to allocate limited resources. Do you spend the money to build a new clinic in an area where five private-sector clinics are operating? It might depend on what the existing facilities are doing.

The Ministry of Health (MOH) could engage with the private sector through on-site training. Or they could provide guidelines for quality assurance, for example, assuring that basic cleanliness practices are being followed. They do these things for public facilities.

RR: Why is it important for governments to pay attention to the services provided by pharmacies?

NB: Pharmacies are ubiquitous and numerous. They see a huge amount of foot traffic—people with all sorts of health conditions. You don’t have long wait times in pharmacies, whereas wait times in a good nonprofit Ghanaian clinic we visited could be one to two hours. There is some evidence that pharmacies are patients’ first line of defense when they have a medical condition.

Although they are required to have a trained pharmacist on site, few pharmacies received technical or financial assistance especially relative to clinics. In Ghana I spoke with the pharmacy regulatory authority. They have a lot of pharmacies to manage, and while they know when a pharmacy opens, they cannot always keep track of when they close. Pharmacists can participate in Ghana’s health insurance scheme, but some said the reimbursement process is so onerous that it’s not worth it to participate.

RR: How should governments be more effectively engaging the private sector to deliver better health services in Kenya and Ghana?

NB: Government should consider what financial or technical assistance would maximize resources while maintaining rigorous quality standards—rather than focusing on [the private sector making] mistakes and criticizing them when they find one. The environment and relationship would be easier if government would step back from playing an antagonistic role. They should ensure appropriate standards and quality at the same time ask the private sector to play an active role in solving the health care problems of the country. Government also needs to ensure that markets are well-functioning and that facilities can work within them—rather than trying to work around them. At the same time, the private sector needs to do its part, doing a better job of communicating what they do to the government.

RR: What’s next in the series?

NB: For our next publication, we are assessing the quality of care provided in private facilities. We are now analyzing a part of the survey where we guided health providers in clinics, pharmacies, and chemical sellers through a standardized medical case, a vignette about a child’s health condition, to see what kind of diagnosis they would make and what treatment they would recommend.

Read the full article in PLoS One: Healthy Firms: Constraints to Growth among Private Health Sector Facilities in Ghana and Kenya.

Education, Health Care
public health, research