Results-Based Financing

1. Presented at the Centers for Disease Control and Prevention (CDC), 6/23/09 An Overview Results-Based Financing Joseph F. Naimoli, Senior Health Specialist The World Bank Contributions from Amie Batson, Ruth Levine, Magnus Lindelow, and Rena Eichler

2. What is RBF? Different definitions; common theme Results-based financing (RBF) ≈ Pay-for-performance (P4P) Provision of payment for the attainment of well-defined results Transfer of money or material goods conditional on taking a measureable action or achieving a predetermined performance target (CGD, 2009) RBF takes many forms… Payers Payees DonorCentral governmentLocal governmentPrivate insurer Recipients of careHealth care providersFacilities / NGOsCentral governmentLocal governments $

3. Increased utilization of MCH services • 3 ANC visits • Institutional delivery • Complete immunization of children under 1 • Post-partum care within 1 week of birth What is RBF? Schemes vary by country Madagascar • Supply-side incentives • Demand-side incentives • Often multiple beneficiaries in a cascading scheme Improved Maternal and Child Health Cash payment to women Increased $ resources for health service providers Increased $ resources for regional & district health authorities

4. People are motivated by intrinsic forces (professional pride) People are motivated by extrinsic forces (money and recognition) If designed well, RBF can reinforce professional pride with money and recognition, without undermining intrinsic motivation What is RBF? Underlying principles

5. Why RBF? Two perspectives RBF

6. Why RBF?Development Assistance Perspective Business as usual unlikely to achieve Millennium Development Goals (MDGs) MDG4 progress in 68 priority countries Source: UNICEF, 2008

7. Why RBF?Development Assistance Perspective Frustration with traditional input-based approaches Inputs necessary but not sufficient! CGD, 2009

8. Why RBF?Development Assistance Perspective Tool for strengthening health system s Health system building blocks, WHO, 2007

9. Why RBF?Development Assistance Perspective Increasing recognition as promising strategy for MDGs Taskforce on Innovative Financing for Health Systems Raising and Channeling Funds • Recommendations: • Clearly link financing for health to defined outcomes and to measurable results in broader programmes as well as in projects, building on the specific experiences from performance-based funding and SWAps. • Further develop and scale up systems that effectively manage development results and provide the incentives for achieving health outcomes. Working Group 2 report ,Final Draft , 3 June 2009

10. Why RBF? Two perspectives RBF

11. Why RBF? Country Perspective Ministry of Finance looking to link decision making to observable results Argentina: Plan Nacer Transfers from federal to provinces (15) based on # of poor women, children enrolled in social insurance program and performance on key output measures Decision: Devolution of federal budget to lower levels in the health system accelerated, in part, by successful results

12. Why RBF? Country Perspective Low uptake of services, especially among the poor Date of DHS % Source: Yazbeck, 2009; Gwatkin, 2007

13. Why RBF?Country Perspective Low uptakes of services, especially among the poor Date of DHS % Source: Yazbeck, 2009; Gwatkin, 2007

14. Why RBF?Country Perspective Quality concerns, even following traditional performance-improvement interventions (training, follow-up and job aids) Source: Bryce J, et al., Improving quality and efficiency of facility-based child health care through Integrated Management of Childhood Illness in Tanzania, Health Policy and Planning, 2005, i69-i76

15. Why RBF?Country Perspective Current incentive structure contributes to poor performance

16. Why RBF? Country perspective Far-ranging experimentation with provider payment reforms RBF Source: Buying results? Contracting for health service delivery in developing countries, Loevinsohn B. and Harding A., The Lancet, 2005, 366, 676-681

17. RBF in practice

18. RBF Challenges Institutional change

19. RBF Challenges Numerous possible implementation hazards RBF in principle… Select action or output Define indicators Set targets Perform Measure performance Reward or sanction Gaming the system Reliability, validity of administrative data Cost of independent verification But… Effort in one, several areas may result in neglect of others Too ambitious, too easy Rules of game Unnecessary provision or demand Quantity trumps quality Too much $, too little Undermining intrinsic motivation Beneficiaries must control behavior change Too many, too few

20. Does RBF work? Solid evidence on demand side • Conditional Cash Transfers (CCTs) rigorously evaluated • Bulk of evidence from Latin American and Caribbean countries; some encouraging evidence from Bangladesh, Cambodia • Effective in reducing poverty in the short term • Substantial increases in use of health services, primarily preventive services • Impact on outcomes mixed • Typically require complementary supply-side actions Source: Fiszbein et al., 2009

21. Does RBF work? Limited, mixed evidence on supply side • Supply side: generally weak designs • Argentina: increased enrollment of poor, previously uninsured women and children • Afghanistan and Cambodia: increases in immunization, prenatal visits, overall service use, equity gains • Many confounding factors (increased financing, TA, feedback, supervision, training, etc.) make it difficult to isolate effect of “incentive”

22. Does RBF work? Rwanda leading the way in sub-Saharan Africa Rwanda: performance bonus scheme • Prospective, quasi-experimental design • Effect of incentives was “isolated” from effect of additional resources • Equal amount of resources without the incentives would not have achieved the same outcomes • Improved child health outcomes: height for age, morbidity Source: Gertler, et al. , 2009

23. Does RBF work? Rwanda leading the way in sub-Saharan Africa • Less impact on demand-sensitive interventions (ANC) • Rwanda now piloting community-based performance bonus to increase demand • Government adopting culture of results – moving RBF to Education and other sectors Source: Gertler, et al. , 2009

24. Does RBF work? Need to open the “black box “ of implementation • Little information on “why” demand and supply schemes succeed or fail • Insufficient information on unintended consequences • Sound monitoring, documentation and evaluation of new initiatives will be critical

25. What’s next?

26. World BankHealth Results Innovation Trust Fund • Eight grants linked to IDA credits to finance the national strategy (International Health Partnership + principles) with focus on MDGs 4 and 5 • Why linked to IDA credits? • Integrates RBF into broader policy dialogue between MOF and MOH • Engages Bank operational staff at country level and headquarters • Embeds RBF into Bank support for HSS • Potentially leverages additional IDA for health • $95 million from Norway supports comprehensive design, implementation, monitoring and impact evaluation

27. The WB Health Results Innovation Trust Fund Country Start End (approx.) Design 2009 2008 Eritrea 2011 2009 D.R. Congo 2011 2008 2009 Zambia 2011 2008 2009 Rwanda 2012 2008 2009 Afghanistan 2013 2008 2010 Benin 2012-13 2009 2010 Kyrgyz Republic 2012-13 2009 2011 2009-10 Ghana 2014

28. Characteristics of Selected RBF Trust Fund Projects • Afghanistan: performance-based bonus payments to NGOs • DR Congo: performance-based bonus payments to public facilities and health workers • Eritrea: demand-side incentives to mothers and performance budgets to administrative levels • Rwanda: performance-based contracting with community organizations to increase demand • Zambia: performance-based bonuses to public facilities and district

29. A common M&E Framework for RBF Monitoring and Documentation Impact Evaluation Inputs Activities Outputs Outcomes Long-run results Resources (time, people, money, commodities, etc.) mobilized Health system platform strengthened (policy, regulations, HMIS, financial procedures, etc.) Contracted work program activities executed Support activities implemented Innovative, improvised solutions applied Contractual services used, delivered and reporting verified Regular, timely, appropriate incentive payments made or withheld Improved coverage of population with high impact interventions Improved quality of care Health promoting behavior change Maternal mortality reduction Infant and child mortality Reduction

30. Conclusions RBF is appealing to governments • Motivation and creativity to strengthen health systems • Flexibility to engage all providers (public, private, NGO) • Culture of results - replacing focus on inputs • Facilitates targeting – at poorest, MDG 4/5

31. Conclusions • Both demand and supply side matter – and must be balanced • RBF not panacea! – must be part of broader dialogue with Ministries of Health and Finance and linked to investments in health • Still building evidence base but exciting potential • Accelerate progress toward MDGs • Implement Paris/Accra Principles – align with the International Health Partnership