Co-payment is an out-of-pocket payment collected by the service provider from members capitated by a health scheme for the purpose of gatekeeping against the misuse of the services. This paper documents an assessment of the effect of copayment on the effectiveness of health services delivered under the capitation scheme in Kenya. The unit of analysis was the 1152 health facilities capitated by the National Hospital Insurance Fund to provide outpatient primary healthcare in Kenya as of July 2015. logit regression was used to analyze the data collected from a sample of 297 capitated health facilities. The Effectiveness of the delivery of health services was evaluated using three metrics; quality, accessibility, and affordability. The regression model for each of the metrics was constructed in order to examine the effect of copayment on the delivery of services. The results revealed that an increment of one unit on copayment increased the index of delivery of quality, accessible and affordable health services by .073, 4.349 and 79.4 respectively. The optimal amount of copayment is determined from the models using theories of calculus.
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