How Managed Equipment Services in Kenya help the private sector contribute to healthcare

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Photo: DFID | Flickr Creative Commons

Health is one of the United Nation’s Sustainable Development Goals (SDGs). However, it is not feasible for any country, rich or poor, to provide its entire population with all needed health services. Accordingly, the private sector has an important role to play in closing the healthcare gap, as it contributes financial resources, innovation, and expertise.

The managed equipment services (MES) arrangement, used in Kenya, is one way to do this. MES is a business model emerging in Kenya’s healthcare system involving partnerships between the private sector and public healthcare providers that offers solutions to some of the challenges posed by the dynamic healthcare industry.

What is MES?

An MES arrangement ensures that public hospitals have access to modern health infrastructure, equipment and/or services over an agreed period , with the government making regular, pre-arranged payments based on agreed performance parameters. Instead of huge capital outlays that would otherwise be required for building or equipping hospitals, MES arrangements offer public entities an opportunity to spread costs over the contract period, thereby allowing for long-term, sustainable budgeting.
Kenya’s MES experience
Strengthening collaboration with the private sector towards building a responsive and sustainable health care system is a key goal of the Kenyan Ministry of Health’s Strategic Investment Plan. Therefore, Kenya is pioneering a large, sustainable healthcare project involving the provision, management and servicing of state-of-the-art medical equipment to approximately 98 hospitals through the MES model .
Key features in the procurement and selection of Kenyan MES contractors are as follows:
Number of health facilities: the MES program covers approximately 98 health facilities across the country.

Bidding in lots: the equipment supplied under the MES arrangement was divided into lots containing specific categories of equipment, such as radiology, ICU, renal, and so forth. Bidders could bid for one or more lots, for which they were required to supply, install, test and commission equipment as well as carry out maintenance, repair, upgrades, and replacement for the duration of the contract at a pre-agreed fee paid at regular intervals.

Original equipment manufacturers (OEMs): the tender was restricted to OEMs to obtain state-of-the-art equipment without the costs of middlemen. 

Training: the MES arrangement included on-the-job user and maintenance training, specialized training, and clinical training in specified fields. 

Lessons learned

  • As the MES Project was the first of its kind in Kenya, it was important to consider the views of all stakeholders in the development and implementation of the project.
  • Ensuring sustainable healthcare through the MES arrangement required an adequate, well-trained health workforce.
  • Proper contract management was key in ensuring sustained efficiency in providing expected health gains. The management of responsibility and risk ensured that both the public and private sector entities met their obligations. 
  • Performance monitoring was fundamental to the MES arrangement as it guided the calculation of payments (and payment deductions) made under the contract.
  • In the absence of sufficient capacity within a procuring entity, it was important to engage skilled transaction advisors to help in the development and contracting for the MES arrangement. Private sector MES providers usually pay for top-notch advisory services during such a transaction. It is important to ensure that the public procuring entity is equally well-represented in developing and negotiating a deal that benefits both parties and that enables the public-sector entity to meet its objectives of provision of sustainable healthcare. 
To ensure sustainable development, there is need to develop innovative healthcare financing strategies to address the challenges faced in the provision of healthcare services.  Kenya’s MES model offers one such avenue for doing so.

Disclaimer:  The content of this blog does not necessarily reflect the views of the World Bank Group, its Board of Executive Directors, staff or the governments it represents. The World Bank Group does not guarantee the accuracy of the data, findings, or analysis in this post.

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Cynthia Olotch

Legal Director, Projects and Infrastructure at IKM

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