| Summary: | There has been growing global attention to Universal Health Coverage (UHC) and countries across the world have placed achievement of UHC amongst their top policy priorities. UHC is defined as ensuring that all citizens can access relevant health services whenever they need care in a manner that ensures they are not exposed to financial hardship. Health financing systems are critical to achieving UHC- one of the building blocks of a health system, health financing is concerned with the mobilization, accumulation and allocation of funds to cover the needs of a population. The purpose of a health financing system is to make funding available, set the right incentives to health care providers and to ensure all individuals have access to effective public and personal health services. A health financing system has three inter related functions; revenue collection, pooling and purchasing which all need to work together for achievement of UHC. Purchasing is defined as the allocation of pooled funds to providers in exchange for medical services. Purchasing can be passive (whereby purchasers simply pay bills presented by providers) or strategic (whereby purchasers continuously apply evidenced based decisions and processes when allocating funds to providers to maximize value). Many countries aiming to achieve UHC have prioritized shifting from passive to strategic purchasing as part of their health financing system reforms. Literature shows evidence that implementation of strategic purchasing can contribute to achieving UHC by: aligning funding and incentives with promised health services to promote access; linking transfer of funds to providers to performance with the goal of promoting quality in service delivery; and enhancing equity in resource distribution. Implementation of strategic purchasing mechanisms is however not a straight forward process as providers can use various sources of power such as: monopoly and bargaining capacity; some provider payment mechanisms such as fee-for-service; and information asymmetry to resist the adoption of strategic purchasing mechanisms. Providers are likely to resist implementations of those mechanisms that they perceive will shift too much of the risk of providing care to them or will erode their economic gains. Purchasers also have sources of power they can use to influence implementation such as: institutional regulatory authority; monopsony and bargaining authority; and some provider payment mechanisms such as capitation. Power in this study is defined as a relation between two parties whereby party A is said to have power over party B to the extent that A can get B to do something that B would not have otherwise done. Kenya has in the past decade formulated and implemented various policies towards achieving UHC, including reforming some of its purchasing functions. An example is the introduction of capitation (a provider payment mechanism) for private providers, by the public purchaser National Hospital Insurance Fund (NHIF). Private purchasers have, as part of strategic purchasing, intervened in clinical decision-making processes amongst private providers as a way of managing costs and improving quality. Existing literature shows public and private purchasers in Kenya are faced with multiple challenges when implementing strategic purchasing mechanisms such as lack of technical expertise, poor planning and resistance from some providers. This study explored the implementation of strategic purchasing mechanisms by NHIF and private purchasers amongst private providers in Kenya to understand the role of various sources of power in influencing implementation outcomes (acceptability and adoption) in order to contribute to work on how to implement strategic purchasing. Private providers in Kenya play a significant role in provision of care and over 40% of facilities in Kenya are privately owned. We employed a multiple case study design. The first case focused on implementation of capitation by the public purchaser NHIF. The second case focused on the implementation of select strategic purchasing mechanisms by private purchasers including intervening in clinical decision-making processes, use of preauthorization and use of specialists for second opinions amongst others. In total eight interviews were completed and eighteen documents(including newspapers articles, documents from websites, and provider-purchaser contracts) were included as data sources. Each case was analysed individually using thematic analysis, after which a cross case analysis was completed. Our findings show that in the first case of the NHIF purchaser, NHIF used its regulatory authority to gazette and hence dictate the capitation rate to providers. NHIF also used its monopsony to convince providers that there would be significant economic gains from the capitation model as NHIF had a huge number of beneficiaries. However, some of the large providers used their monopoly and bargaining capacity to walk away from the scheme as they still commanded significant market share even without the NHIF capitation business as they felt the proposed capitation rate was too low. In the second case, private purchasers used contracts as a source of power to give them some authority to control prices of services and ensure providers adhered to strategic purchasing mechanisms such as use of preauthorization processes. Some private providers on the other hand used various sources of power to resist implementation such as information asymmetry to by-pass some of the documentation requirements set by the private purchasers. Some providers also used monopoly and fee-for service payment mechanisms to dictate prices of services to purchasers. Some private providers did however willingly adopt some of the strategic purchasing mechanisms namely: preauthorization processes and use of step-down facilities as they felt these minimized the risk of unpaid claims. Across the two cases, NHIF seemed to have had relatively more power over providers compared to private purchasers. For example, NHIF gazetted the capitation rates and did not revise them despite strong opposition from some of the large private providers, whilst private purchasers complained that some of the large private providers always had their way by dictating prices of their services to the private purchasers. Whilst there have been a growing number of recent studies touching on strategic purchasing in Kenya, few of them have focused on the role of power and/or implementation of strategic purchasing in Kenya. This study focused on how various sources of power for providers and purchasers can affect implementation of strategic purchasing in order to provide insight into the implementation of strategic purchasing mechanisms. The study found that private providers can use their various sources of power to resist adoption of strategic purchasing mechanisms they do not deem acceptable; some mechanism are however deemed acceptable and are willingly adopted. The study also highlights that purchasers can use their sources of power to influence adoption of strategic purchasing amongst providers. The study hopes to provide insight to policy makers and purchasers on the need to consider the role of power when implementing strategic purchasing mechanisms and to plan accordingly. One general lesson on implementation includes the importance of early communication and dialogue when implementing strategic purchasing mechanisms.
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