1. Performance Incentive
Contracts Experience
in Cambodia
by the BTC supported projects
Dr. Dirk Horemans 17th of December 2008

2. What’s on the menu?
Background
Basic assumptions and set-up
Results
Lessons learnt
The future
Final remarks

3. Cambodia Health Situation
Aftermath of War and Khmer Rouge Genocide
Population: 14 Million
Traditional picture of developing countries health situation:
Communicable Diseases, high child and maternal morbidity and
mortality but already in epidemiological transition with increasing
numbers of diabetes, hypertension and Road Traffic Accidents
Recent Substantial Improvements for several key health indicators
(Cambodian Demographic health Survey 2005 versus 2000); But
Maternal Mortality Ratio remains very high
– Infant Mortality Rate: 95  66
– Under Five Mortality Rate: 124  83
– HIV prevalence:  0.6%
– Maternal Mortality Ratio: 437  472
Per Capita Health Expenditure (2005): total 37US$ from which
25US$ (68%) Out of Pocket, 22% donors, 10% Government
Human Resources: mal distribution, important shortage of midwives,
very low government salaries, non regulated private practice by civil
servants, limited managerial capacities

4. Provision of Basic Health Services
Projects
Two Bilateral Projects, started in 2004, 4-year period, 8,750,000 Euro
3 provinces: Siem Reap, Otdar Meanchey, Kampong Cham (3/10
Operational Districts)
Co-management => co-decision/implementation by PHD and
Operational Districts
Both PBHS projects aim at improving the health, especially of mothers
and children, thereby contributing to poverty and socio-economic
development of the Province
– 6 Project Components (in line with 6 Key areas of work of the National Health Strategic
Plan 2003-2007)
Health Equity Funds (Contracted out to Consumer Right’s Organizations)
Performance Contracting
Behavioral Change Communication
Quality Improvement
Human Resource Development
Institutional Capacity Strengthening

5. BTC Health Projects in Cambodia
Provision of Basic Health Services in Siem Reap and Otdar Meanchey
Provision of Basic Health Services in Kampong Cham Province

6. Basic Assumptions ~ Performance

7. What was the set-up of PBHS? (1)
Partial answer to two main Human Resource problems:
very low salaries
Staff reward and sanction system is not functional
Built on successful experience by MSF with performance contracts and
HEF in Sotnikum Operational District (OD), “New Deal”
but with expansion to provincial level
⇒ PHD/Project contracting ODs & Referral Hospitals
⇒ ODs contracting Health Centers
Contracts with institution not with individual staff
Institution contracts with individual staff
Contracts cover staff incentives + HEF + support to training, HEF, BCC,
quality improvement => 1 FTE = available x motivated x competent staff)
only: very limited project support for other operational aspects
Total number of staff 1,642 in 3 PHDs, 8 ODs, 109 HC, 9 hospitals
Long preparation phase with intensive staff participation (all contracts
were in place by end 2005)

8. What was the set-up of PBHS? (2)
Dynamic contracts dealing with changing financial situation (inflation,
user fee income) and new coping mechanisms
– Changing of incentives
– Changing of indicators and targets (process and output indicators)
– Changing monitoring and scoring mechanisms
ODs and PHD responsible for monitoring and scoring, => development
of a new department/unit to deal with these responsibilities
2 Cambodian Technical Assistants (project staff) responsible for
conception and adaptation of system, coordination, controlling
BTC contribution towards Incentives in 2007: 749,000 USD
Project Incentives contribution pooled with other income (user fees, HEF)

9. Fair Deal for the Health Staff…
GET GIVE
Respect golden rules
UF + (HEF)
No under-table payment
+ GoC
Transparency UF-GoC budget –
+ PBHS funds (decreasing)
CMS Drugs & equipments
+ Others (MSF,…) No poaching of patients to private
sector
Respect of attendance as agreed
Motivating incentives
Half-time or full-time
Sufficient Rec. Costs

10. ….but even better on ‘the other side’?
– Nursing Staff average total monthly income
– Total (Private + Public Sector):150-300$
– From Public Sector only: 150$ (incentives 50-100$ +
Salary)
– Physicians average total monthly income:
– Total (Private + Public Sector): 1000-2000$
– From Public Sector only: 230$ (incentives 125-150$ +
Salary)

11. What are the results? (1)
Findings based on September 2008 evaluation of PBHS-Kampong Cham (=>Kampong
Cham biased), House Hold Survey (baseline versus follow up), the Mid Term Review, HIS
data and observations by project team
Confounding factors (changing performance incentives and quality assessment systems)
Good understanding by staff of the current incentive system
Very Transparent (procedures and implementation)
Increased commitment nurses to work in public health sector because
of important increased income from public sector (<= total earning of
staff = Public sector through incentives and salaries + private sector)
But less so for physicians, income from private sector proportionally
much bigger)

12. What are the results? (2)
Increase in outputs and coverage rates:
– HC consultations per capita: initial increase from 0.50 in 2005 to
0.90 in 2006 back 0.61 in 2007 (nationwide drop attributed to lack of
drugs)
– Hospitalizations per 1,000 persons: large increase, from 10 in
2005 to 18 in 2007, much bigger than national trend, important
influence of HEF
– ANC2 coverage: large increase, from 71% in 2005 to 85% in 2007,
much bigger than national trend
– Deliveries at Health Facilities: large increase, from 10% in 2005 to
22% in 2007
– Deliveries by Trained Attendants: large increase, from 33 % in
2005 to 43% in 2007
– Family Planning: slight increase, from 21% in 2005 to 24% in 2007
– Immunization coverage (fully immunized): substantial increase,
from 59% in 2005 to 70% in 2008 (survey data)
– Malnutrition: no improvement (survey data)
– Infant Mortality (per 1000) decreased from 89 in 2005 to 73.4 in
2008 (survey data; but not significant (small sample size?))

13. What are the results? (3)
Quality of Services as observed by evaluation team
– Technical quality of consultations at HC average for Cambodia
(consultation equal to provision of medicine)
– Quality of Hospital Care better than Cambodian average
User fee Revenue of (Self paying + HEF)
– Kampong Cham Provincial Hospital increased from 185,000$ in 2005
to 281,000$ in 2007
– Average annual hospital revenue for the 3 KC District Hospitals
increased from 7,700$ in 2005 to 44,000$ in 2007
– Average annual HC revenue in the 3 KC ODs increased from 370$ in
2004 to 1,535$ in 2007

14. What are the lessons? (1)
Subsidies based on % of target and without bonuses for results above
target < motivating than subsidies per case or subsidies which reward
performance without a maximum cap.
Combination of user fee revenue (augmented by HEFs/vouchers for the
poor) and subsidies => satisfactory wage through public sector work for
midwives and nurses.
Physician earnings from public sector work remain very small relative to
their total earnings => low motivation for public sector work
R/ need for mechanisms to regulate private practice by public sector
physicians or even integrate private practices into public facilities
Acceptable capacity of OD and PHD monitoring teams and newly
established Provincial Health Financing Units

15. What are the lessons? (2)
Self-evaluation and self-scoring for PHD level gives biased results
Effect performance contracting on outputs is reduced when incentives are primarily
based on process indicators.
In order for performance contracting to reach its potential with regard to utilization
of curative care and to become financially sustainable, need for :
– Reliable and adequate drug supplies
– Improved interpersonal and technical quality of care
– Responsive service hours
– Addressing problem of demand for treatments (IVs etc) contrary to MoH protocol
Increasing access to private clinics/pharmacies (~ socioeconomic development),
will undercut utilization of public services unless perceived Q issues are tackled.
Limited impact on clinical quality of care (multi-factorial; difficult to monitor)
Contracting fatigue

16. Conclusion
Combined with other strategies as HEF, Training, BCC and Quality
Improvement the Performance Based Incentive Scheme implemented by the
System (PHD and OD) in the context of a bilateral project contributed
significantly to the motivation of the health personnel and hence to increased
utilization of health services and and coverage rates and this at the extended
scope of three provinces

17. What does the future bring? (1)
Public Act Reform
Obj: institutionalization and appropriation of contracting and
performance incentives by Cambodian Government
– Incentive schemes:
MBPI (‘back office’ staff)
No additional topping-ups!
Functional an analysis: what about staff without contract?
PMG (‘front office’ staff)
Incentives midwives
Proportion user fees for staff incentives 40-> 60%
HEF
Yearly salary increases up to 15%

18. What does the future bring? (2)
– Service delivery grants
Partner financing mechanism of the second Health Sector
Support Program (HSSP2) with growing counterpart contribution
Obj: More autonomy, responsiveness, quality and efficiency
Grants to SOA (OD and Referral Hospitals) based on AOP
Through PHD
For recurrent costs and capacity reinforcement only
Includes management targets
Variation ~pop, ~performance, ~other incomes = ?

19. What does the future bring? (3)
PBHS2, a 3-year consolidation phase
Alignment to incentive schemes and SDG
Harmonization through partnership HSSP2 as a ‘discrete, non-
pooling partner’
HEF
8 OD + 9 Referral Hospitals: SDG with techn/managerial CR
PHD: support in managing + monitoring SDG
Central MOH: ‘Information and Evidence for Policy’
=> More sector wide approach

20. Income for the staff in US$
250 Average monthly income over all staff in the province,
foressen trend
200 CBHI
Users
60% HEF-paid fee
t
g
s tin
en
150 Boo 60% User fee
em
HS
ag
PB Delivery Bonus
Government
an
PMG
100
M
y-
Allowance
Grey
lit
Night duty
ua
Q
50
p-
Salary
hi
rs
ne
w
0
O
2004 2005 2006 2007 2008 2009
1st Phase 2nd Phase

21. Expected Evolution of Financing Sources
for Operational Costs and Performance Incentives
% of required financing
100
Government
80
60 User Fees
SHI
40 HEF
20 Financial Boosting
0
2004 2005 2006 2007 2008 2009 2010 2011 20.. 20..

22. Some general questions (1)
Do we keep a comprehensive view on health and on HR
management? Is there ‘Collateral damage’? Equity for the
users? Role of integrated formative supervision?
What about non-financial incentives? Public appreciation for
excellence?
Cost and workloas of the inevitable control mechanisms?
Opportunity cost? Risk of ‘nivellation’?

23. Some general questions (2)
How equitable can performance monitoring become
(‘handicap’ of individual HC)? Effect on motivation?
How much appropriation by government? Or temporary
partner financing mechanism?
Place of field interventions in times of increasing budget
support? Alignment to field needs?
How can we better link field interventions and scientific
coaching => capitalisation?

24. « Not everything what you can
measure is interesting, and not
everything what is interesting
can be measured »