First Global Symposium on Health Systems Research Montreux, November 2010

1. The Impact of Performance-Based Financing on the Cost of Health Services in Rwanda First Global Symposium on Health Systems Research Montreux, November 2010 Presenter: David Collins Management Sciences for Health Rwanda IHSS Project

2. Authors • Dr Agnes Binagwaho, Permanent Secretary, MOH, Rwanda • Dr  Bonaventure Nzeyimana, MOH, Rwanda • Dr Richard Gakuba, MOH, Rwanda • Dr György Fritsche, World Bank • Thomas McMennamin, University of California, Berkeley • Christine Mukantwali, USAID/IHSSP, Rwanda • David Collins, USAID/IHSSP, Rwanda

3. PBF in Rwandan health system • Following successful pilots, PBF was introduced in all government health facilities in 2006. • Main objectives - improve the coverage, the quantity and quality of priority services. • Incentives paid for total visits and services such as ANC, <5 growth monitoring, FP, immunization, assisted deliveries, VCT, PMTCT and TB/HIV.

4. Other factors • CBHI rolled out nation-wide, with enrollment reaching 74% by December 2006. CBHI only reimburses for curative services. • Performance contracts were signed by the President and the Mayors to increase and improve health services. • Greater autonomy given to health facilities and HR management was decentralized.

5. Other factors • Emphasis placed on the expansion of key services. • Renovation of buildings, renewal of equipment and additional ambulances. • Staff received large salary increases. • Significant donor support was received.

6. Study objectives • Reportedly, the PBF contributed to increases in key services and better quality of care • Study objective was to see what changes in costs occurred, specifically: • Did service increases or shifts result in more total costs? • Did unit costs decrease (because more services were produced from available resources)?

7. Methods • Used 2005 – 2007 data collected previously to cost HIV services at 6 health centres. • Activity-based costing using standard costs based on Rwandan protocols. • Spreadsheet tool called CORE Plus was used. • Preliminary findings follow……………………..

8. Total and per capita average numbers of preventive and curative services per health centre

9. Average expenditure by category and per capita per health centre (US$)

10. Top services by number and by expenditure

11. VCT Average cost per service 2005 2006 2007 Average number of VCT services per health centre 1,161 2,849 4,847 Average cost per service (US$) Medical supplies 0.69 0.63 0.57 Lab tests 1.53 1.53 1.53 Direct staff time 0.26 0.30 0.59 Indirect staff time 0.01 0.02 0.01 Operating costs 0.75 1.24 2.40 Total 3.23 3.72 5.10 Average cost per VCT service for 2005 to 2007 (US$)

12. Actual Ideal Actual Needed services per services per number of number of provider provider clinical staff clinical staff hour hour 2005 13 19 2.08 1.90 2006 11 22 2.06 1.82 2007 14 23 1.76 1.68 Actual and needed clinical staffing

13. Staffing • Insufficient clinical staff meant that either staff worked longer hours than they should or quality of care was weak for some services. • The data were not detailed enough to allow for the above to be analyzed but, reportedly, staff worked longer hours than previously. And previous studies have concluded that quality of care improved during this period.

14. Conclusions • PBF and other factors resulted in more services and a shift toward preventive services. • Additional expenditure (eg staff and equipment) was incurred because more funding became available and was needed for quality improvements and increases in services. • Cost per service increased because of the additional indirect expenditure, shifts to higher paid staff and increased salaries.

15. Conclusions • Based on the results of these 6 health centres • If a PBF results in more services or shifts to higher- cost services and a increased quality then total expenditures will need to increase. • If the indirect costs of services are under-funded then the average expenditure for each service will also need to increase.

16. Limitations • The health centres were not selected randomly. • Data were not collected for any control group • Only expenditures made by, or for, the facility are included. • The original data collected for drug expenditures was incomplete and standard costs were used instead.

17. Limitations (continued) • Capital expenditures, depreciation and training costs were not included. • Operating costs include some non-recurrent expenditures and some expenditures that should be included in other expense categories. • PBF was introduced in May 2006 but data were only available for whole years.

18. Data restrictions • The data shown in this presentation will be subject to further review and should not be quoted without permission of the authors.

19. Thank you