The feasibility of social impact bonds in financing tertiary health care quality: qualitative stakeholders’ perspectives in Kenya

The increasing demand for high-quality healthcare and the persistent limited funding against the growing need for universal health coverage across African health systems has ignited interest in innovative financing models. Social Impact Bonds (SIBs) are becoming an alternative financing mechanism due to their ability to attract private investments through outcome-based funding. However, there’s low adoption of SIB health financing in the African context, calling for empirical evidence on its feasibility. Kenya’s public health sector is undergoing reforms to complement traditional funding with innovative instruments such as SIBs to improve tertiary healthcare quality. This qualitative study explored the perspectives of 55 key stakeholders—including Ministry of Health and National Treasury policy makers, hospital managers, and social health investors’ financial experts—on the feasibility of adopting SIBs to finance quality improvements in Kenya’s tertiary hospitals. Data were collected through semi-structured interviews and were analyzed thematically. Stakeholders perceived SIBs as conceptually attractive for promoting outcome-based financing and improving health care quality. The model has the potential to mobilize additional funding for Kenya’s tertiary health sector. However, legal, institutional, political, and financial barriers, as well as concerns about sustainability, applicability to continuous tertiary services, and the risk of prioritizing easily measurable outcomes, pose significant challenges. From a public finance perspective, the successful implementation of SIBs requires enabling legislation, political leadership, credible government financial commitments, and capacity-building to attract private investors. This is necessary to manage contingent liabilities, ensure budget credibility, and reduce investor risk premiums associated with outcome-based contracts. Pilot programs, strategic alignment with tertiary national health priorities, and robust institutional frameworks are essential. Further research is recommended to evaluate the feasibility, design, and impact in primary healthcare, including specific policy and legislative reforms.