1. Performance based financing in low income
countries
A panorama of existing
performance based financing
schemes
Nicolas de Borman
AEDES
AEDES www.aedes.be
Rue Joseph II, 1000 Brussels
+ 32 219 03 06

2. 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

3. 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

4. Supply side Health system
intervention
MSH (NGO) 27 NGOs
Private Service Providers
Contracting entity
Fundholder ~ 100 health facilities :
Technical assistance
Hospitals
Health centers
USAID Funding
dispensaries
Contract : Payment :
  Fixed tranche : 95% of budget
Yearly contract
  Variable tranche : 0 – 10 % of
Only NGO and FBO
budget, based on achievement
 Agreement on output targets
of output target and process
(BHP)
indicators
 Agreement on yearly subsidy
 Maximum 105 % of budget
needed to achieve target
allocated

5. Cambodia : Performance incentives
Context :
 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

6. Supply side Demand side
intervention intervention
Operational
District
Health Equity Funds
International NGO
Hospital
NGO managed
Fundholder
Donor funded
Contracting agency
Technical assistance
Health
Funding : Centers and
Multi donor dispensaries
Payment :
Contract :
 Mix of process and output
 Contract of health center and
indicators
hospital
 Output, different systems :
 Key element : staff behaviour
 Flat rate subsidy per service
 Limited involvement of
provided
regulation
 Target + ceiling

7. Rwanda: PBF
Context :
 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

8. Administrative
Supply side Demand side
District
intervention intervention
Contracting
entity
Ministry of finance Health
Hospital
Fundholder insurance
Funding :
Governement of
Health
Rwanda &
Centers and
donor (HIV)
dispensaries
Contract : Payment:
 
District (decentralized entity of Payment made by MOF and
MOPH) contracts service providers. donors
 
Contract with Steering Committee Flat rate subsidy per service
provided. Example: 1$/fully
 Public and FBO contracted. But
immunized children.
private can be subcontracted by

facilities No ceiling
 Bonus for quality

9. Key achievements in Rwanda
• 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

10. 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)

12. 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)

13. Fonds d’Achat de Service de Santé
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)

14. South Kivu
Coverage :
 Idjwi, Katana & Shabunda: 605.000 hab
Specificities :
 Local NGO acts as fundholder and
contracting agency
 Multisector PBF in Shabunda (health,
education and road)

15. Current trend
• 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

16. Kenya : voucher for maternal health
Intervention
 Started in 2006
 Voucher for maternal health
& family planning
Coverage:
 3 districts + 2 slums in Nairobi
 1,7 million people in rural districts
Contracted service providers
 54 Public, FBO, NGO & private

17. Demand side
intervention
Autonomous gov.
agency
(NACPD)
Fundholder
Provincial / Contracting body
District
ng
regulator
di KFW funding
n
Fu
g
in
nd
Hospital
Fu
Voucher
distributor
Poor Woman
Health
FP or Safe
Centers and
dispensaries Delivery
Voucher
Contract & control: Payment:
 
Agency contracts Voucher Cash, on reception of the
distributors voucher
 Marketing & management of
scheme
 Public, FBO and private
 Specific role for national
insurance : accreditation and
quality control

18. Madagascar
Intervention
 Started in 2008
 “Système tiers payant”
 Emergency obstetric and paediatric
care
Coverage:
 2 regions
 4 public hospitals

19. Supply side
intervention Provincial /
District
regulator
2 national NGOs
Fundholder
Contracting agency Hospital
World Bank funding
Health
Centers and
dispensaries
Contract
 National NGO contracts
Hospitals
 Public hospitals only
 Free healthcare for patients
Payment:
 Lump sum cost based subsidy
per intervention

20. How important for providers?
Transfer to health % health facility incomes
facilities $/yr/hab 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%

21. Scaling up
Phase 1 : Phase 2 : Phase 3 :
NGO or project initiative Multi donor Institutionalized
Single donor On plan (SWAP) 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.

22. Who is the fundholder?
 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).

23. 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

24. Thank you for your attention