The Impact of Performance-Based Financing on the Cost of Health Services in Rwanda First Global Symposium on Health Systems Research Montreux, November.

The Impact of Performance-Based Financing on the Cost of Health Services in Rwanda

First Global Symposium on Health Systems ResearchMontreux, November 2010

Presenter: David CollinsManagement Sciences for Health

Rwanda IHSS Project

Authors Dr Agnes Binagwaho, Permanent Secretary, MOH, Rwanda Dr Bonaventure Nzeyimana, MOH, Rwanda Dr Richard Gakuba, MOH, Rwanda Dr Gyorgy Fritsche, World Bank Thomas McMennamin, University of California, Berkeley Christine Mukantwali, USAID/IHSSP, Rwanda David Collins, USAID/IHSSP, Rwanda

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PBF in Rwandan health system

Following successful pilots, PBF was introduced in all government health facilities in 2006.

Main objectives - improve the coverage, the quantity and quality of priority services.

Incentives paid for total visits and services such as ANC, <5 growth monitoring, FP, immunization, assisted deliveries, VCT, PMTCT and TB/HIV.

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Other factors

CBHI rolled out nation-wide, with enrollment reaching 74% by December 2006. CBHI only reimburses for curative services.

Performance contracts were signed by the President and the Mayors to increase and improve health services.

Greater autonomy given to health facilities and HR management was decentralized.

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Other factors

Emphasis placed on the expansion of key services.

Renovation of buildings, renewal of equipment and additional ambulances.

Staff received large salary increases. Significant donor support was received.

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Study objectives

Reportedly, the PBF contributed to increases in key services and better quality of care

Study objective was to see what changes in costs occurred, specifically:– Did service increases or shifts result in more total

costs?– Did unit costs decrease (because more services were

produced from available resources)?

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Methods

Used 2005 – 2007 data collected previously to cost HIV services at 6 health centres.

Activity-based costing using standard costs based on Rwandan protocols.

Spreadsheet tool called CORE Plus was used. Preliminary findings follow……………………..

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0

5,000

10,000

15,000

20,000

25,000

30,000

2005 2006 2007Serv

ices

Years

Total and per capita average numbers of preventive and curative services per health centre

Curative Services

Preventive services

1.37

1.08

1.40

72%

28%

62%

38%

46%

54%

Total and per capita average numbers of preventive and curative services per health centre

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$9,594 $20,131

$42,171 $31,720

$31,740

$48,646

$9,838

$18,261

$31,246

$-

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

2005 2006 2007

Average expenditure by category and per capita per health centre (US$)

Salaries

Drugs and tests

Operating costs

$2.72

$3.64

$6.16

Average expenditure by category and per capita per health centre (US$)

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Top services by number and by expenditure

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2005 2006 2007

Top 6 services in terms of average number per health centre

Upper respiratory infections - adult

Upper respiratory infections - child

Family planning

Well child

Other illnesses

VCT6%11%

18%

15%

8%

11%

7%

7%

39%

56%

65%

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2005 2006 2007

Top 6 services in terms of average expenditure per health centre

PMTCT

Lower respiratory infections - adult

Family Planning

Well child

Other illnesses

VCT9% 16%

22%

11%

14%

11%

4%4%

43%

57%

67%

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Average cost per VCT service for 2005 to 2007 (US$)

VCT Average cost per service 2005 2006 2007Average number of VCT services per health centre 1,161 2,849 4,847

Average cost per service (US$)Medical supplies 0.69 0.63 0.57Lab tests 1.53 1.53 1.53Direct staff time 0.26 0.30 0.59Indirect staff time 0.01 0.02 0.01Operating costs 0.75 1.24 2.40Total 3.23 3.72 5.10

Actual number of clinical staff

Needed number of clinical staff

Actual services per

provider hour

Ideal services per

provider hour

2005 13 19 2.08 1.90 2006 11 22 2.06 1.82 2007 14 23 1.76 1.68

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Actual and needed clinical staffing

Staffing

Insufficient clinical staff meant that either staff worked longer hours than they should or quality of care was weak for some services.

The data were not detailed enough to allow for the above to be analyzed but, reportedly, staff worked longer hours than previously. And previous studies have concluded that quality of care improved during this period.

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Conclusions

PBF and other factors resulted in more services and a shift toward preventive services.

Additional expenditure (eg staff and equipment) was incurred because more funding became available and was needed for quality improvements and increases in services.

Cost per service increased because of the additional indirect expenditure, shifts to higher paid staff and increased salaries.

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Conclusions

Based on the results of these 6 health centres If a PBF results in more services or shifts to higher-

cost services and a increased quality then total expenditures will need to increase.

If the indirect costs of services are under-funded then the average expenditure for each service will also need to increase.

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Limitations

The health centres were not selected randomly.

Data were not collected for any control group Only expenditures made by, or for, the facility

are included. The original data collected for drug

expenditures was incomplete and standard costs were used instead.

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Limitations (continued)

Capital expenditures, depreciation and training costs were not included.

Operating costs include some non-recurrent expenditures and some expenditures that should be included in other expense categories.

PBF was introduced in May 2006 but data were only available for whole years.

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Data restrictions

• The data shown in this presentation will be subject to further review and should not be quoted without permission of the authors.

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Thank you