Management and Economics Research Journal
open access

Does Social Franchising Private Health Facilities Shift Consumers Budget Line? An Econometric Analysis of the Average Treatment Effect within Private Health Facilities in Embu County, Kenya

DOI : 10.18639/MERJ.2020.961352

Section : Original Research Article

Published Date : Jan 31,2020



The Kenyan private health sector is one of the most developed in Sub-Saharan Africa and is highly critical in healthcare delivery. It is estimated 47 percent of the first quintile of income earners utilize the private facility for healthcare needs and 33 percent of women seek family planning (FP) services in this sector. However, the cost of healthcare services has been a great impediment to service utilization. To improve service quality and increase access, social franchising, interventions on the demand side such as the use of insurance and vouchers, and supply of subsidized medical products on the supply side are intended to reduce the cost of services. This study sought to investigate the impact of interventions of social franchisors on the cost of healthcare in private facilities in Kenya. The study used primary data collected from 215 individuals living within catchment areas with private health facilities using researcher-administered questionnaire. The main franchisors included in this study were Sustainable Health Foundation (CFW) and Population Services Kenya (Tunza). Results revealed that women whose primary motivation to visit private facilities included FP services, need of a lower cost of treatments, and quality services had higher odds of choosing franchised health facilities. Propensity score matching (PSM) using three matching criteria—nearest neighbor, kernel matching, and radius matching of 0.01—indicated that individuals seeking children’s health services and 3-month FP methods paid similar amounts in either franchised or nonfranchised health facilities. However, there was a huge cost variance for long-term FP methods where women paid significantly less, implying that social franchisors’ main impact is on long-term FP methods. The cost variance was due to vouchers utilized by some respondents hence, incurring zero cost in franchised facilities. Therefore, the study recommends the expansion of social franchising membership and the use of the voucher system for financially incapable consumers.

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