Performance based financing in low income countries

A panorama of existing performance based financing schemes

AEDES www.aedes.be

Rue Joseph II, 1000 Brussels

+ 32 219 03 06

Nicolas de Borman AEDES

Objective : provide an overview of PBF interventions and main trends

Which countries? For how long ? How do the schemes function? (contracting agent,

fundholder) How large ? Main trends

Haiti : “Pay for Performance”Context :

Low performance of public health system Strong NGO and FBO health facilities

Intervention Started in 1999 Performance based payments

Size : Entire country. No particular geographic coverage 500.000 target population in 1999 2,8 million today. ~30% of total population

Supply side intervention

MSH (NGO)

Contracting entity Fundholder Technical assistance

USAID Funding

27 NGOs Private Service Providers

~ 100 health facilities : Hospitals Health centersdispensaries

Health system

Contract : Yearly contract Only NGO and FBO Agreement on output targets

(BHP) Agreement on yearly subsidy

needed to achieve target

Payment : Fixed tranche : 95% of budget Variable tranche : 0 – 10 % of

budget, based on achievement of output target and process indicators

Maximum 105 % of budget allocated

Cambodia : Performance incentivesContext :

Inefficient public health system Private practice and under table

payments Intervention

Started in 1999. Performance incentives. Basic health services (health center

& hospital) Different phases and systems Part of a larger health system reform

(equity funds) Coverage:

20 / 77 Health District

Supply side intervention

Demand side intervention

International NGO

Fundholder Contracting agencyTechnical assistance

Funding: Multi donor

Health Centers and dispensaries

Hospital

Health Equity Funds

NGO managedDonor funded

OperationalDistrict

Contract : Contract of health center and

hospital Key element : staff behaviour Limited involvement of

regulation

Payment : Mix of process and output

indicators Output, different systems :

Flat rate subsidy per service provided

Target + ceiling

Rwanda: PBFContext :

Post conflict reconstruction Public and faith based facilities

Intervention Started in 2001 Performance based financing Preventive and curative (incl. HIV) Health Center & Ref. hospital

Coverage: Entire country (~9 million people) ~450 health facilities

Supply side intervention

Demand side intervention

Ministry of financeFundholder

Funding : Governement of Rwanda & donor (HIV)

Health Centers and dispensaries

Hospital Health insurance

AdministrativeDistrict

Contracting entity

Contract : District (decentralized entity of

MOPH) contracts service providers. Contract with Steering Committee Public and FBO contracted. But

private can be subcontracted by facilities

Payment: Payment made by MOF and

donors Flat rate subsidy per service

provided. Example: 1$/fully immunized children.

No ceiling Bonus for quality

• Separation of functions. Purchaser – provider – regulation – controller split

• Success of integrating public, non-for profit and private facilities

• Not only about staff incentives, but PBF is a systemic health financing tool

• First scheme to be fully institutionalized

Key achievements in Rwanda

Burundi : regional dissemination (1)Context :

Post conflict situation. Weaker government than in Rwanda

Free health services (woman & U5) Intervention

Since 2006 Similar setting as in Rwanda

Coverage: ~2.000.000 people. ~25% of the population

Difference with Rwanda : Provincial Funds (vs. national) Provincial fundholder and contracting

agency is NGO/Project Cordaid (yellow) Swiss cooperation (Red) HNI (blue)

DRC : Regional dissemination (2)

Context : War, weak government, transport

problems Limited health sector resources

available

Interventions Started in 2006 & 2007

Fonds d’Achat de Service (blue and yellow). Third payer.

Agence d’Achat Sud Kivu (red)

Size : 4 provinces. ~14 million people

Specificities : Fundholder & contracting agency :

Etablissement d’Utilité Publique. Joint donor and government agency. One per province.

Funding from EC

Payment : First phase : in drugs (yellow area) Second phase : in cash (blue area)

Fonds d’Achat de Service de Santé

Coverage : Idjwi, Katana & Shabunda: 605.000 hab

Specificities : Local NGO acts as fundholder and

contracting agency Multisector PBF in Shabunda (health,

education and road)

South Kivu

• Expansion of schemes similar to Rwanda : – Within the region : DRC & Burundi, but also : Central African

Republic, Sudan, Zambia, Tanzania,…– Elsewhere : Afghanistan, Indonesia, Cambodia,…

• But also other output based financing schemes : – Voucher systems : Kenya, Uganda, Bengladesh, India,

cambodia,… – targeted interventions : HIV, TB, maternal health.

2 examples. Kenya and Madagascar

Current trend

Kenya : voucher for maternal health Intervention

Started in 2006 Voucher for maternal health

& family planningCoverage:

3 districts + 2 slums in Nairobi 1,7 million people in rural districts

Contracted service providers 54 Public, FBO, NGO & private

Demand side intervention

Health Centers and dispensaries

Hospital

Autonomous gov. agency (NACPD)

FundholderContracting body

KFW funding

Provincial /District

regulator

Funding

Fund

ing

Voucher distributor

FP or Safe Delivery Voucher

Poor Woman

Contract & control: Agency contracts Voucher

distributors Marketing & management of

scheme Public, FBO and private Specific role for national

insurance : accreditation and quality control

Payment: Cash, on reception of the

voucher

MadagascarIntervention

Started in 2008 “Système tiers payant” Emergency obstetric and paediatric

careCoverage:

2 regions 4 public hospitals

Supply side intervention

2 national NGOs

FundholderContracting agency

World Bank funding

Health Centers and dispensaries

Hospital

Provincial /District

regulator

Contract National NGO contracts

Hospitals Public hospitals only Free healthcare for patients

Payment: Lump sum cost based subsidy

per intervention

Transfer to health facilities $/yr/hab

% health facility incomes coming from PBF

Cambodia 0,25 - 0,5 5 - 25% Rwanda ~1,8 15 - 35% Burundi 0,7 - 2 30 - 35%

DRC 0,3 - 1,8 30 - 70%

Kenya ~1,7 > 50% Madagascar 0,25 ~25%

How important for providers?

Scaling up Phase 1 :

NGO or project initiativeSingle donor

Phase 2 : Multi donor

On plan (SWAP)

Phase 3 : Institutionalized

Gov & donor On plan, on budget

Initial phase : Initiative. key role played by NGOs and projects Second phase : Strengthening. Need to broaden the financial

basis. Gradual improvement of system. Key role played by development partners and bi-laterals.

Third phase : Institutionalization. Key role played by the government. Ownership and support from other stakeholders.

Need an institution to be able to monitor contracts and organize control. Flexibility is needed.

Rationale of having independent contracting entities : private (NGOs, health insurance,…) or public (decentralized government entities, independent gov. agencies). Not a single answer.

But : Reluctance of MOPH to see large share of budget going to INGOs Reluctance of MOF to see large share of budget going to external

independent agencies (even governmental).

Who is the fundholder?

Conclusion

Performance based financing has proved to be successful and adaptable in different environments

Not a single model, but flexible and evolutive approach

PBF, a trend that is growing rapidly. Key challenge : scale up and institutionalization

Thank you for your attention