A survey of environmental developments and Firms' responses in the health insurance sector in Kenya

Environmental turbulence is a phenomenon facing organizations globally \nand locally as they strive towards achieving their set objectives and goals. \nThe environmental changes cut across different contexts and sectors. Kenya \norganisations are no exception to this. \nThis study focused on environmental developments in the health insurance \nsector in Kenya, the main objectives being to establish the challenges facing \nthe sector and the strategic responses by the organisations affected. \nThe study employed a census survey methodology to collect the relevant \ndata. The population of interest was 25 organisations i.e 13 private \ninsurance companies, 11 HMOs and 1 social health insurance scheme. \nThese are the organisations in the business of health insurance in Kenya. \nA Questionnaire was designed and used to collect data through personal \ninterview and drop and pick approaches later. A response rate of 60% (i.e. \n15 respondents) was attained. \nThe study reveals that 60% of companies studied are fully locally owned, \n53.03% have a capital base of less than Kshs 1 billion, over 66% of \ncompanies studied indicated limited delegation of authority and \nresponsibility and 93.3% do have mission statements. There was consensus \nthat premiums and claims have been going up over the last 5 years. \n \nThe results of the study reveals that organisations in the business of health \ninsurance in Kenya faces a number of challenges and the escalating \nhealthcare costs leads them all. It was also revealed that in coping with \nthese challenges, various strategies are pursued. All the organisations \nrevealed they do carry out the scanning of the business environment, \nformulate strategies that will enable the firms cope with changing \nenvironment, and develop capacities that matches the developed strategies \nto the firms' activities. \nThe findings indicate that trends in the business environment leads forces \ninfluencing strategy formulation i.e with a mean score of 4.47 which tends \ntowards the most important score which is 5. It was further revealed that of \nthe companies that responded 73.3% pursue a combination of both emergent \nand planned strategies. \nEscalating healthcare costs was revealed to be a major challenge. It cut \nacross the respondents that Networking and cooperation amongst the players \nin the sector is the most preferred approach to tackle most of the challenges \nthey are facing. \nThe study focused mainly on the health insurance sector. There is need for a \nfurther study to be carried out to examine the developments and responses in \nthe broader scope of health care management to which health insurance is \njust part of