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Performance Based Financing. Principles and Practices. Cordaid Postal Box 16440, 2500 BK The Hague Lutherse Burgwal 10 2512 CB The Hague Netherlands www.cordaid.nl. Piet Vroeg Program Officer Department of Health and Well being T: +31(0) 703136522 F: +31(0) 703136511

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Principles and Practices

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Principles and practices l.jpg

Performance Based Financing

Principles and Practices

Cordaid

Postal Box 16440,

2500 BK The Hague

Lutherse Burgwal 10

2512 CB The Hague

Netherlands

www.cordaid.nl

Piet Vroeg

Program Officer

Department of Health

and Well being

T: +31(0) 703136522

F: +31(0) 703136511

[email protected]

Performance Based Financing


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  • Our Profile

  • Dutch development organisation

  • 80 years emergency aid and structural development;

  • Almost 1000 partners in 36 countries in Africa, Asia, Latin America, Central and Eastern Europe ;

  • Annual budget 170 million Euro;

  • Solid base in the Netherlands: 370.000 contributors,

  • Rooted in the catholic missionary tradition (Caritas, Medicus Mundi).

Performance Based Financing


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  • Why PBF?

  • Principles

  • Rwanda Pilot

  • Scaling Up

  • Expectations

  • Challenges

Performance Based Financing


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Hospital Miblizi Rwanda

Performance Based Financing


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Why PBF?

  • Rwanda 2002 :

  • Despite huge investments in the Health Sector;

  • Health Indicators did not improve.

  • “The system was able to absorb but not to produce”

  • Response: Introduction of Performance Based Financing

Performance Based Financing


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  • Principles

Performance Based Financing


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The Principles

  • More than a contract:

    • Separation of Functions

    • Inclusion of the Private sector (non-profit and for-profit)

    • Community Participation and Verification

Performance Based Financing


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Regulator

Supervision

Legislation

Provider

Consumer

Purchaser

Negotiation

Separation of Functions

Performance Based Financing


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Separation of Functions

  • The regulator controls for the quality of the inputs and processes

  • The purchaser verifies the outputs and pays a fee for service;

  • Autonomous provider some key decision rights;

    • Incentives to staff

    • Hiring and Firing

    • Procurement of Medicaments and Material

    • Investment in Infrastructure

Performance Based Financing


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Inclusion of Private Sector

  • All capable providers should have access to a performance contract either directly or with a subcontract

    • Increase geographical access

    • Separation of the good from the bad

    • Increase competition between health facilities

  • Think about: Private Practitioners, Village Health Workers, Traditional Birth Attendants, NGO’s (hiv/aids)

Performance Based Financing


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Community Participation

  • High level of community participation contracting:

  • Health Committees (co-management)

    • To increase transparency

    • To increase access for the most vulnerable

  • Local Associations (audits and feedback)

    • To increase accountability

    • To increase relevance/satisfaction

  • Performance Based Financing


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    • Rwanda Pilot

    Performance Based Financing


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    Pilot Profile (1)

    • The pilot started in 2003 in four health districts of the former Cyangugu province (now Western Province) and was taken over by MoH on 1st January 2006

    • Initially funded by the Dutch Ministry of Foreign Affairs

    • Catchment area 630.000 people

    • Total Investment3,000,000 USD

    • Investment pppy1.65 USD

    • Transaction costs25% in 2005

    Performance Based Financing


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    Pilot Profile (2)

    • Purchaser contracted:

      • 4 Hospitals

      • 24 Health Centers

      • 4 District Health Teams

      • 24 Local associations

    • Health Centers sub-contracted:

      • 20 Private Dispensaries

    • and initiated

      • 14 Health Posts

    Performance Based Financing


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    Monitoring and Evaluation

    • Monthly Monitoring of Utilization (purchaser)

    • Quarterly Monitoring of Quality HC (regulator)

    • Quality Review System Hospitals (peers)

    • Quarterly Verification and Satisfaction Surveys

    • (local community associations contracted by purchaser)

    • Household Surveys (2003 and 2005) (project consultant)

    • End of Project Evaluation (external consultants)

    Performance Based Financing


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    Results (Utilization)

    Performance Based Financing


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    Results (Quality)

    When looking at the 3-year averages, the overall total quality index for the province was 74.1%, with a range from 66% - 88.5% over the HCs. However some of the outliers are huge jumping from 20%-90%

    Performance Based Financing


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    Results (Financial Access)

    Difference in price paid for service between 1st and 10th survey by local associations (FRw)

    Changes in Financial implications of illness according to Household surveys 2003-2005

    Performance Based Financing


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    • Scaling Up

    • or Rolling Out

    Performance Based Financing


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    Pilots

    • Until now most PBF initiatives have started by an NGO.

    • There seems to be a pathway of growth

      • Small seed projects with a limited number of services financed with proper funds and executed with traditional partners

      • Pilot projects that cover one or more zones/districts/provinces with a population of minimum 300.000 people, financed by external donors such as Dutch Ministry of Foreign Affairs, European Commission, Norad and WB ).

      • National roll out of the initiative by the government with funding through a consortium of various multilateral and bilateral donors sometimes including “vertical donors” (PEPFAR, GAVI)

    Performance Based Financing


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    Overview

    • Rwanda 2003

    • RDC 2005

    • Tanzania 2006

    • Zambia 2007

    • Burundi 2007

    • CAR 2010

    • Cameroon 2010?

    Performance Based Financing


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    Issues

    • How to institutionalize the new Purchaser?

    • How to timely pay the provider?

    • How to collect and verify information in a cost effective manner?

    • In how far is civil society allowed to participate?

    • Is the private sector eligible?

    Performance Based Financing


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    Purchaser

    • The Purchaser can fulfill several crucial functions:

      • Holding the contract

      • Verification of quantity

      • Control of quality

      • Audit

      • Coaching/Supervision

      • Payment

    Performance Based Financing


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    Rwandan Pilot

    Government

    Ministry of Public Health

    Ministry of Interior

    Provincial Hospital and Inspection

    Province

    Contract

    Payment

    Verification

    Coaching

    District Hospital and Inspection

    Districts

    Health Center

    Village

    QC

    Audit

    NGO

    TBA

    Provider

    Health Committee

    Population

    Church

    VHW

    Insurance

    Performance Based Financing


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    Rwanda National System

    Government

    MoF

    Payment

    Ministry of Public Health

    Ministry of Interior

    Provincial Hospital and Inspection

    Province

    District Hospital and Inspection

    Districts

    QC

    Supervision

    Health Center

    Village

    Audit

    NGO

    TBA

    Provider

    Health Committee

    Population

    Church

    VHW

    Insurance

    Contract

    Verification

    Performance Based Financing


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    DRCongo South Kivu Pilot

    Goverment

    Ministry of Public Health

    Ministry of Interior

    Provincial Hospital and Inspection

    Province

    District Hospital and Inspection

    Districts

    Contract

    Payment

    Verification

    Supervision

    Health Center

    Village

    Audit

    QC

    NGO

    TBA

    Provider

    Health Committee

    Population

    Church

    VHW

    Insurance

    Performance Based Financing


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    Burundi Roll Out

    Government

    Ministry of Public Health

    Ministry of Interior

    Provincial Hospital and Inspection

    Province

    Contract

    Payment

    District Hospital and Inspection

    Districts

    QC

    Supervision

    Health Center

    Village

    Audit

    NGO

    TBA

    Provider

    Health Committee

    Population

    Church

    VHW

    Insurance

    Verification

    Performance Based Financing


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    Expectations

    • More efficient (lower user fees)

    • More production

    • Higher Quality

    • Better geographical access

    • Stronger Consumer Participation

    • More inclusion

    • Less Morbidity

    • Better Health

    Performance Based Financing


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    Challenges

    • Access for the most vulnerable (inclusiveness)

    • Macro-financing (sustainability)

    • How to adapt to different contexts (flexibility)

    • How to deal with volatile situations (resilience)

    • Integration Vertical Programs

    • Community Participation

    Performance Based Financing


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    Get for what you pay

    Performance Based Financing


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