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Improving Health Outcomes Through Performance Based Financing USAID Mini-University Johannesburg, South Africa April 3, 2008. John Pollock with inputs from Uder Antoine, Paul Auxila, David Collins, Bernateau Desmangles,

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Improving Health Outcomes Through Performance Based FinancingUSAID Mini-UniversityJohannesburg, South Africa April 3, 2008

John Pollock

with inputs from Uder Antoine, Paul Auxila, David Collins, Bernateau Desmangles,

Rena, Eichler, Gyuri Fritsche, Jean Kagubare, and Kathy Kantengwa, Louis Rusa

pay for performance
Pay for Performance

Working Definition: Transfer of money or material goods conditional on taking a measurable action or achieving a predetermined performance target*

  • Demand side examples: Payment to households linked to an action or result: conditional cash transfer programs (Nicaragua), TB patient incentives (food to adhere), India assisted deliveries
  • Supply side examples: Payment to providers (individual health workers, service providing institutions ) linked to attainment of predetermined results

P4P imposes financial risk: Payment is received when (or withheld until) results (or actions) are verified

*source: Center for Global Development Working Group on Payment for Performance

how does it work
How does it work?
  • The financing agency organizes its input resources to maximize desired results… with transfer of funds (or perhaps continuity of support) being subject to achievement of specific, pre-defined performance goals.
  • In the case of health services, managers need to have incentive to innovate to improve efficiency and quality
  • There should be a reward for reaching targets and a consequence or penalty for failure.
why use pbf
Why use PBF?
  • Resources can be targeted to fill real needs to make compliance possible and improve outcomes (food supplements in return for adhering to TB treatment)
  • Productivity gain can overwhelm the cost of incentives (sometimes rendering a negative cost to improved performance)
  • Accountability and Ownership is enhanced
usaid initiatives involving pbf
USAID Initiatives Involving PBF
  • Haiti and Rwanda; excellent examples of health sector innovation (Haiti), and P4P in SWAP (Rwanda), both were implemented using Mission support and HQ TA.
  • Nicaragua and Afghanistan; evolving support in multi-donor environment and REACH Program (Afg.), and key inputs for large social sector P4P project (Nica) – Mission and HQ support.
  • Malawi and Dem. Rep. of Congo; P4P work with FBOs in CHAM Project (Malawi) and P4P work with the CORE Group in DRC – Mission supported.
  • Tanzania, Zambia, Uganda, Ghana, Nigeria, Kenya, and Liberia; Roadmaps developed, some pilot studies and next phases moving forward with Mission and HQ supported TA.
  • Ethiopia : Through the HIV / AIDS Care and Support Project (HCSP), USAID is support MOH to design and implement a PBF program for the health system.

NOTE: a summary of USAID-supported PBF initiatives is being prepared by Chris Barratt.

who s who in the world of p4p
Who’s Who in the World of P4P?

Donor support

  • US Agency for International Development
  • Department for International Development (DFID)
  • Netherlands Government
  • Australian Government Overseas Aid Agency (AusAID)
  • Swedish International Development Cooperation (Sida)
  • Belgian Technical Cooperation (BTC)
  • German Technical Cooperation (GTZ)
  • NORAD (Norway)
  • The World Bank
  • Inter-American Development Bank (IADB)
  • The Bill and Melinda Gates Foundation (BMGF)
  • International Finance Corporation (IFC)
how has pbf worked
How has PBF worked?
  • PBF has worked in less than ideal environments,

and has potential to accelerate the achievement of

Millennium Development Goals.

In Haiti in 2004 and 2005, immunization rates were held at levels over 90% during major social upheaval and though natural disasters

  • it has demonstrated ability to improve staff performance, financial allocation, logistical management, service quality and access, and program monitoring elements
haiti hs2004 and hs 2007 projects
Haiti (HS2004 and HS 2007 Projects)
  • USAID Resource base totaled over $140,000,000 by end of HS2007 (Investment continues with SDSH Pwojé Djanm)
  • PBF contract work with NGOs was core

(public sector work uses memoranda of understanding)

  • Each participating NGO agreed to accept 95% of their target budget (which is issued at regular intervals in amounts requested by the NGO).
  • The incentive (bonus) is 10% of the target budget if all targets are substantially met (resulting in an additional 5% over the target budget that can be allocated by the NGO on a discretionary basis)
consequence and risk
Consequence and Risk
  • Failure to meet individual targets results in a reduction of the incentive according to a pre-specified formula.
  • General failure would result in no incentive payment and would represent a significant penalty to the NGO (5% of projected operating costs)
haiti 2005 indicators benchmarks used1
Haiti -2005 Indicators/Benchmarks used

When using Family Planning Indicators,

Tiahrt standards must be met

haiti experience of the ngos
Haiti – Experience of the NGOs
  • Pressure to achieve targets drove
    • Strategies to motivate staff
    • Reduced inefficiency.
    • Strengthened collection and use of data
  • Less financial reporting and increased flexibility appreciated
  • Technical assistance received from the project on-demand
  • Indicators negotiated - agreed upon targets reasonable.
  • Regular assessment of progress and evaluation of strategies to achieve objectives.
  • Creation of team spirit.
average performance changes from year prior to pbf to the first year in pbf
Average Performance Changes fromYear Prior to PBF to the First Year in PBF

(CGD Working Paper 121) “Performance-based Incentives for Health: Six Years of Results from Supply-Side Programs in Haiti” (Rena Eichler, Paul Auxila, Uder Antoine, Bernateau Desmangles)

how does it work1
How Does it Work?

USAID projects: Fixed-price contract with performance fee

Has worked in both public sector (Rwanda) and

private sector (Haiti) -

Managers must have room to make decisions and to innovate

(the “Black Box”)

For Demand Side: Can connect target (immunized child) with

Established incentive (food supplementation/distribution)

why use pbf1
Why Use PBF?
  • More efficient allocation of health resources and in the way health services are organized and delivered
  • Improve governance and accountability
  • Positive changes in how information is generated and used for decision-making
  • Enhance providers’ link with communities
  • Health workers are motivated and their capacity enhanced
  • Accelerate achievement while maintaining quality and reliability
design and implementation of pbf
Design and Implementation of PBF
  • Clear Goals
  • Measurable indicators with Negotiated Targets
  • Defined rewards and or penalties (and standards)
  • Validation and accountability
  • Transparency
how rwanda coordinates donors to align payment practices
How Rwanda Coordinates Donors to Align Payment Practices
  • GOR pays outputs throughout Rwanda
  • Coordination of design phase through PBF technical working group
  • PBF admin system pays straight into the health facility bank accounts., with database linked to payments.
  • PHC services protected by linking payments of HIV and PHC monies to levels of quality of general services.
  • One national approach (and with all donors), same institutional set-up, unit costs and admin system facilitates alignment
  • Payments from donors pooled at the health facility level…….
how the pbf unit is staffed and what systems are in place
How the PBF unit is Staffed and what Systems are in Place
  • MOH central PBF Unit (CAAC): 1 coordinator and two full-time staff
  • internet based database entry and retrieval facilitate decentralization
  • Semi-automated payment module, linked to central database,
  • Central database allows monitoring & accurate forecast of financial risk
  • National level PBF TWG
  • PBF website managed by a TWG multi-agency subgroup: knowledge transfer and management
http www pbfrwanda org rw
http://www.pbfrwanda.org.rw
  • Database for PBF
  • (reporting & analysis)
  • Forum for users
  • Documents
  • Current Information
rwanda gicumbi return on investment for vct
Rwanda- GicumbiReturn on Investment for VCT
  • The USG paid $13.30 for each of 3,008 VCT tests

in 4 health centers in the Gicumbi District in 2005/6.

  • Following the initiation of PBF in these centers, in 2006/7 production of VCT tests increased by 275% to 11,264.
  • USG paid $4.47 for each VCTtest.

saving $8.83 per VCT test (66%)!

results for family planning users at the end of the month
Results for Family Planning Users at the end of the Month

Family Planning, Modern Methods, Users at the end of the Month Average per Health Center per Month

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Results: FP Injections and oral methods at Health Centers % Increase in Prevalence over 24 months; (average absolute increase from 3.89% to 10.63%)

January 2006 through December 2007

family planning injections and oral methods at health centers absolute prevalence dec 2007
Family Planning: Injections and oral methods at Health Centers: Absolute Prevalence, Dec. 2007
results for institutional deliveries in health centers
Results for Institutional Deliveries in Health Centers

Institutional Deliveries at the Health Center Average per Health Center per Month

slide31
Institutional Deliveries in Health Centers: % increase over 24 m, average absolute coverage increased from 23.8% to 38.2%
slide32

Institutional Deliveries in Health Centers:

Absolute coverage, December 2007

rwanda ownership and the future
Rwanda- Ownership and the Future
  • With support of all of our partners,

we already have ownership of the PBF initiative.

  • Sustainability must be addressed

(avenues for reflection include mutuelles)

  • PBF reinforces the Rwandan health system …

and is a good area for partner collaboration.

  • Our great challenge: our system must be credible and easy to use.

(excerpted from comments of Dr Louis Rusa, Director CAAC/MOH Rwanda 2/25/08)

key success factors
Key Success Factors
  • Identification and involvement of all key stakeholders is essential for success in the design and implementation of PBF
  • Clearly defined and agreed and measurable goals must be linked to routine and transparent reporting with an effective system for validating data.
  • It must be at the core of a program (Cannot dabble in PBF) – local ownership!
potential problems with pbf
Potential Problems with PBF
  • Targets specified without agreement of implementers
  • The target indicators can get disproportionate attention

(in relation to the full package of services)

  • Political pressures – Coercion –

(for Family Planning, Tiahrt standards must be met)

  • Gaming can occur
lessons and other considerations
Lessons and Other Considerations
  • Public Sector – Private Sector
  • Role of Risk
  • Sharing data –Transparency
  • Participatory Validation
usaid comparative advantage in pbf
USAID Comparative Advantage in PBF
  • Significant body of experiences that have been documented and validated
  • Growing network of practitioners among network of partners (within USG, In Ministries, NGOs, CAs, and among other donors)
  • Existing mechanisms that allow for creative and adaptive design.
key operational actions
Key Operational Actions
  • Discuss the PBF concept and experiences in different countries with the concerned officers of the Ministries of Health, Finance and Planning. (if response is positive move to the next steps)
  • Determine what other donors such as World Bank and Norwegians are planning to do in terms of PBF.
  • Organize a workshop to discuss PBF concept and its applicability more widely with stake holders.
  • Mobilize funding for introducing the program (possibly on a pilot basis)
  • Support training program for the Ministry and NGO staff
  • Select an implementing agency or mechanism to implement and evaluate

Consult with 2007 Kigali PBF workshop participants to discuss status and follow-up in other countries analyze five priority health problems that can be addressed through PBF