Performance-Based Financing

Abstract

Performance Based Financing (PBF) is an innovative, results-oriented approach that incentivizes to providers based on their achievement of agreed-upon, measurable performance targets. Incentives include financial payments, bonuses, and public recognition. Similar incentives can also be used to motivate people to use services, to give birth at a facility, or complete TB treatment, for example. PBF can increase the use and quality of health care services, stabilize or decrease the cost of these services, support the effective use of limited resources, and improve staff motivation, morale, and retention. MSH implements PBF schemes at various levels by helping governments, private organizations, and funding agencies strengthen management capacity, estimate costs, set incentive payments, develop performance indicators, and bolster information and financial management systems. MSH also provides technical assistance to help governments, private organizations, and funding agencies develop and implement their own PBF programs. These programs can align with donor requirements, address local health system priorities, and maximize synergy between local stakeholders and actors by sharing tools, approaches, and systems. To strengthen health systems, MSH promotes effective management of performance-based contracts combined with host country capacity building, quality improvement of health services, strategic data use, and community involvement in health interventions to increase demand and support sustainable improvements. PBF improves health service quality and quantity by incentivizing staff to improve performance and achieve results. MSH is a key partner in health-sector reforms that have helped Rwanda—where maternal and child mortality fell by more than 70 percent between 2000 and 2013—become a global model for advancing universal health coverage. In pioneering performance-based financing programs, community health workers receive financial incentives for referring pregnant women for skilled delivery care and accompanying them to health facilities, while national community-based health insurance expanded coverage from 7 percent to 74 percent in ten years, so fewer families face financial catastrophe due to health care costs. Additionally: MSH has designed and successfully implemented PBF programs in 14 countries on three continents. These programs focus on priority health areas, including HIV and AIDS, maternal, newborn, and child health, family planning and reproductive health, and primary health care services. In Haiti, through the USAID-funded Santé pour le Développement et la Stabilité d'Haïti (SDSH) project, MSH helped implement a PBF program at private-sector health facilities throughout the country's ten departments. The project provided access to HIV and AIDS, family planning, and maternal, newborn, child health services for nearly 4.5 million Haitians. Through the USAID-funded Leadership, Management, and Governance (LMG) project, MSH now is helping Haiti's Ministry of Health design and implement a public-sector PBF program. In Uganda, MSH is implementing the USAID-funded STRIDES for Family Health Project, which uses performance-based mechanisms at the district and community levels in 15 target districts to expand the coverage and quality of a package of essential services. In the Democratic Republic of the Congo, MSH has pioneered a results-based financing system that has led to improved health outcomes at health facilities. MSH has also conducted extensive training in PBF and developed tools, including USAID's The PBF handbook: Designing and Implementing Effective Performance-Based Financing Programs and the Performance-Based Financing Dashboard.