Effects of Capitation on Service Quality in Hospitals Accredited by Nhif in Nairobi County, Kenya

Abstract

The project sought to establish the effect of capitation payment on health care service delivery in hospitals accredited by the NHIF in the county government of Nairobi, Kenya. Specifically, this project sought to establish the effects of capitation payment to service provider accredited by NHIF and to determine the effects of capitation payments on quality of healthcare services delivered to NHIF patients. Guided by the SERVQUAL model and using a primary data collected through a SERVQUAL questionnaire, the study established that capitation increases service quality by 35.85%. These findings are in line with Peter, et al. (2003) who outlined that capitation influences services quality delivery positively by fostering innovation in disease management, and by encouraging integration of various components of the health delivery system. On the second objective of establishing the effect of capitation payment to service provider, the study established that expected service quality and service provider (hospitals) which is perceived through capitation had a negative relationship with service providers. The study established that the number of provides reduced hence affecting the ratio of service providers to patients. Ratio of service providers to patients reduced perceived service quality by 9.14%. These findings are in line with Baffour (2013) who established that Thai private providers had initially responded negatively to the introduction of capitation on the basis of perceived low rate of the capitated amount. We thus recommend the use of Capitation in health care provision in Nairobi county.