AAR Health Services, Kenya: Is the Provision of Financing a Cost-effective Intervention to Motivate the For-profit Health Sector in the Delivery of Family Planning Services?

This paper presents a case study of AAR Health Services in Kenya, a managed care company in Nairobi, which delivers family planning services to the low income population. The study was commissioned by USAID funded Summa Foundation, to examine the impact of a loan that it extended to AAR Health Services.

The author states that the intervention of Summa foundation was stipulated with six goals:

• Goal 1: Integration of full range family planning services into AAR's package of prepaid services: High Success;
• Goal 2: Increasing number of buyers for the AAR's family planning services: Low Success;
• Goal 3: Making family planning delivery sustainable: High Success;
• Goal 4: Shifting public health sector users to private health sector: Low Success;
• Goal 5: Assisting AAR in entering low income market: High Success;
• Goal 6: Supporting AAR in adopting managed care principles: High Success.

As per the author the Summa loan to AAR is also a cost-effective intervention. AAR has proved successful in tackling process obstacles (lack of training, capital) rather than structural barrier (lack of market demand, financial incentives).

The author observes that:

• The government regulation and market demand for health play significant part in motivating private players to come into the health care system;
• Linking family planning with revenue increment and cost reduction would further motivate for-profit health providers.