Results-Based Financing

An Overview

Joseph F. Naimoli, Senior Health SpecialistThe World Bank

Contributions from Amie Batson, Ruth Levine, Magnus Lindelow, and Rena Eichler

Presented at the Centers for DiseaseControl and Prevention (CDC), 6/23/09

Results-based financing (RBF) ≈ Pay-for-performance (P4P)

Provision of payment for the

attainment of well-defined

results

Transfer of money or material goods conditional on taking a

measureable action or achieving a predetermined performance target

(CGD, 2009)

DonorCentral governmentLocal governmentPrivate insurer

$Recipients of careHealth care providersFacilities / NGOsCentral governmentLocal governments

RBF takes many forms…

Payers Payees

Different definitions; common theme

Supply-side incentives

Demand-side incentives

Often multiple beneficiaries in a cascading scheme

Madagascar

Increased utilization of MCH services•3 ANC visits•Institutional delivery•Complete immunization of children under 1•Post-partum care within 1 week of birth

Improved Maternal and Child Health

Cash payment to women

Increased $ resources for health service

providers

Increased $ resources for

regional & district health authorities

Schemes vary by country

People are motivated by intrinsic forces (professional pride)

People are motivated by extrinsic forces (money and recognition)

If designed well, RBF can reinforce professional pride with money and recognition, without undermining intrinsic motivation

Underlying principles

RBF

Two perspectives

Business as usual unlikely to achieve Millennium Development

Goals (MDGs)

MDG4 progress in 68 priority countries

Source: UNICEF, 2008

Frustration with traditional input-based approaches

CGD, 2009

Inputs necessarybut not sufficient!

Tool for strengthening health system s

Health system building blocks, WHO, 2007

Increasing recognition as promising strategy for MDGs

Recommendations:

• Clearly link financing for health to defined outcomes and to measurable results in broader programmes as well as in projects, building on the specific experiences from performance-based funding and SWAps.

• Further develop and scale up systems that effectively manage development results and provide the incentives for achieving health outcomes.

Taskforce on Innovative Financing for Health Systems Raising and Channeling Funds

Working Group 2 report ,Final Draft , 3 June 2009

RBF

Two perspectives

ARGENTINA: PLAN NACER

Ministry of Finance looking to link decision making to observable results

Transfers from federal to provinces (15) based on # of poor women, children enrolled in social insurance program and performance on key output measures

Decision:Devolution of federal budget to lower levels in the health systemaccelerated, in part, by successful results

%

Low uptake of services, especially among the poor

Source: Yazbeck, 2009; Gwatkin, 2007

Date of DHS

%

Low uptakes of services, especially among the poor

Source: Yazbeck, 2009; Gwatkin, 2007

Date of DHS

Source: Bryce J, et al., Improving quality and efficiency of facility-based child health care through Integrated Management of Childhood Illness in Tanzania, Health Policy and Planning, 2005, i69-i76

Quality concerns, even following traditional performance-improvement interventions (training, follow-up and job aids)

Current incentive structure contributes to poor performance

RBF

Source: Buying results? Contracting for health service delivery in developing countries, Loevinsohn B. and Harding A., The Lancet, 2005, 366, 676-681

Far-ranging experimentation with provider payment reforms

Institutional change

Select action or output

Define indicato

rs

Set target

s

Perform

Measure performa

nce

RBF in principle…

But…Effort in one, several areas may result in

neglect of others

Too ambitious, too easy

Beneficiaries must control behavior

change

Too many, too few

Gaming the system

Reliability, validity of

administrative data

Cost of independent verificationToo much $, too

little

Undermining intrinsic

motivation

Rules of game

Unnecessary provision or

demand

Quantity trumps quality

Reward or

sanction

Numerous possible implementation hazards

Conditional Cash Transfers (CCTs) rigorously evaluated

Bulk of evidence from Latin American and Caribbean countries; some encouraging evidence from Bangladesh, Cambodia

Effective in reducing poverty in the short term

Substantial increases in use of health services, primarily preventive services

Impact on outcomes mixed

Typically require complementary supply-side actions

Solid evidence on demand side

Source: Fiszbein et al., 2009

Supply side: generally weak designs

Argentina: increased enrollment of poor, previously uninsured women and children

Afghanistan and Cambodia: increases in immunization, prenatal visits, overall service use, equity gains

Many confounding factors (increased financing, TA, feedback, supervision, training, etc.) make it difficult to isolate effect of “incentive”

Limited, mixed evidence on supply side

Rwanda leading the way in sub-Saharan Africa

Source: Gertler, et al. , 2009

Rwanda: performance bonus scheme

Prospective, quasi-experimental design

Effect of incentives was “isolated” from effect of additional resources

Equal amount of resources without the incentives would not have achieved the same outcomes

Improved child health outcomes: height for age, morbidity

Rwanda leading the way in sub-Saharan Africa

Source: Gertler, et al. , 2009

Less impact on demand-sensitive interventions (ANC)

Rwanda now piloting community-based

performance bonus to increase demand

Government adopting culture of results – moving RBF to Education and other sectors

Little information on “why” demand and supply schemes succeed or fail

Insufficient information on unintended consequences

Sound monitoring, documentation and evaluation of new initiatives will be critical

Need to open the “black box “ of implementation

Eight grants linked to IDA credits to finance the national strategy (International Health Partnership + principles) with focus on MDGs 4 and 5

Why linked to IDA credits? Integrates RBF into broader policy dialogue between MOF

and MOH Engages Bank operational staff at country level and

headquarters Embeds RBF into Bank support for HSS Potentially leverages additional IDA for health

$95 million from Norway supports comprehensive design, implementation, monitoring and impact evaluation

Country Start End (approx.)

Eritrea 2009 2011

D.R. Congo 2009 2011

Zambia 2009 2011

Rwanda 2009 2012

Afghanistan 2009 2013

Benin 2010 2012-13

Kyrgyz Republic 2010 2012-13

Ghana 2011 2014

Design

2008

2008

2008

2008

2008

2009

2009

2009-10

Afghanistan: performance-based bonus payments to NGOs

DR Congo: performance-based bonus payments to public facilities and health workers

Eritrea: demand-side incentives to mothers and performance budgets to administrative levels

Rwanda: performance-based contracting with community organizations to increase demand

Zambia: performance-based bonuses to public facilities and district

Inputs Activities Outputs Outcomes Long-run results

Improved coverage of population with high impact

interventions

Improved quality of care

Health promoting behavior change

Maternal mortalityreduction

Infant and child mortality

Reduction

Impact EvaluationMonitoring and Documentation

A common M&E Framework for RBF

Contractual services used, delivered and

reporting verified

Regular, timely,

appropriate incentive payments made or withheld

Contracted work program

activities executed

Support activities

implemented

Innovative, improvised solutions applied

Resources (time, people,

money, commodities,

etc.) mobilized

Health system platform

strengthened (policy,

regulations, HMIS, financial

procedures, etc.)

RBF is appealing to governments

Motivation and creativity to strengthen health systems

Flexibility to engage all providers (public, private, NGO)

Culture of results - replacing focus on inputs

Facilitates targeting – at poorest, MDG 4/5

Both demand and supply side matter – and must be balanced

RBF not panacea! – must be part of broader dialogue with Ministries of Health and Finance and linked to investments in health

Still building evidence base but exciting potential Accelerate progress toward MDGs Implement Paris/Accra Principles – align

with the International Health Partnership