Principles and Practices

Performance Based Financing Principles and Practices Cordaid Postal Box 16440, 2500 BK The Hague Lutherse Burgwal 10 2512 CB The Hague Netherlands www.cordaid.nl Piet Vroeg Program Officer Department of Health and Well being T: +31(0) 703136522 F: +31(0) 703136511 piet.vroeg@cordaid.nl Performance Based Financing

Our Profile • Dutch development organisation • 80 years emergency aid and structural development; • Almost 1000 partners in 36 countries in Africa, Asia, Latin America, Central and Eastern Europe ; • Annual budget 170 million Euro; • Solid base in the Netherlands: 370.000 contributors, • Rooted in the catholic missionary tradition (Caritas, Medicus Mundi). Performance Based Financing

Why PBF? • Principles • Rwanda Pilot • Scaling Up • Expectations • Challenges Performance Based Financing

Hospital Miblizi Rwanda Performance Based Financing

Why PBF? • Rwanda 2002 : • Despite huge investments in the Health Sector; • Health Indicators did not improve. • “The system was able to absorb but not to produce” • Response: Introduction of Performance Based Financing Performance Based Financing

Principles Performance Based Financing

The Principles • More than a contract: • Separation of Functions • Inclusion of the Private sector (non-profit and for-profit) • Community Participation and Verification Performance Based Financing

Regulator Supervision Legislation Provider Consumer Purchaser Negotiation Separation of Functions Performance Based Financing

Separation of Functions • The regulator controls for the quality of the inputs and processes • The purchaser verifies the outputs and pays a fee for service; • Autonomous provider some key decision rights; • Incentives to staff • Hiring and Firing • Procurement of Medicaments and Material • Investment in Infrastructure Performance Based Financing

Inclusion of Private Sector • All capable providers should have access to a performance contract either directly or with a subcontract • Increase geographical access • Separation of the good from the bad • Increase competition between health facilities • Think about: Private Practitioners, Village Health Workers, Traditional Birth Attendants, NGO’s (hiv/aids) Performance Based Financing

Community Participation • High level of community participation contracting: • Health Committees (co-management) • To increase transparency • To increase access for the most vulnerable • Local Associations (audits and feedback) • To increase accountability • To increase relevance/satisfaction Performance Based Financing

Rwanda Pilot Performance Based Financing

Pilot Profile (1) • The pilot started in 2003 in four health districts of the former Cyangugu province (now Western Province) and was taken over by MoH on 1st January 2006 • Initially funded by the Dutch Ministry of Foreign Affairs • Catchment area 630.000 people • Total Investment 3,000,000 USD • Investment pppy 1.65 USD • Transaction costs 25% in 2005 Performance Based Financing

Pilot Profile (2) • Purchaser contracted: • 4 Hospitals • 24 Health Centers • 4 District Health Teams • 24 Local associations • Health Centers sub-contracted: • 20 Private Dispensaries • and initiated • 14 Health Posts Performance Based Financing

Monitoring and Evaluation • Monthly Monitoring of Utilization (purchaser) • Quarterly Monitoring of Quality HC (regulator) • Quality Review System Hospitals (peers) • Quarterly Verification and Satisfaction Surveys • (local community associations contracted by purchaser) • Household Surveys (2003 and 2005) (project consultant) • End of Project Evaluation (external consultants) Performance Based Financing

Results (Utilization) Performance Based Financing

Results (Quality) When looking at the 3-year averages, the overall total quality index for the province was 74.1%, with a range from 66% - 88.5% over the HCs. However some of the outliers are huge jumping from 20%-90% Performance Based Financing

Results (Financial Access) Difference in price paid for service between 1st and 10th survey by local associations (FRw) Changes in Financial implications of illness according to Household surveys 2003-2005 Performance Based Financing

Scaling Up • or Rolling Out Performance Based Financing

Pilots • Until now most PBF initiatives have started by an NGO. • There seems to be a pathway of growth • Small seed projects with a limited number of services financed with proper funds and executed with traditional partners • Pilot projects that cover one or more zones/districts/provinces with a population of minimum 300.000 people, financed by external donors such as Dutch Ministry of Foreign Affairs, European Commission, Norad and WB ). • National roll out of the initiative by the government with funding through a consortium of various multilateral and bilateral donors sometimes including “vertical donors” (PEPFAR, GAVI) Performance Based Financing

Overview • Rwanda 2003 • RDC 2005 • Tanzania 2006 • Zambia 2007 • Burundi 2007 • CAR 2010 • Cameroon 2010? Performance Based Financing

Issues • How to institutionalize the new Purchaser? • How to timely pay the provider? • How to collect and verify information in a cost effective manner? • In how far is civil society allowed to participate? • Is the private sector eligible? Performance Based Financing

Purchaser • The Purchaser can fulfill several crucial functions: • Holding the contract • Verification of quantity • Control of quality • Audit • Coaching/Supervision • Payment Performance Based Financing

Rwandan Pilot Government Ministry of Public Health Ministry of Interior Provincial Hospital and Inspection Province Contract Payment Verification Coaching District Hospital and Inspection Districts Health Center Village QC Audit NGO TBA Provider Health Committee Population Church VHW Insurance Performance Based Financing

Rwanda National System Government MoF Payment Ministry of Public Health Ministry of Interior Provincial Hospital and Inspection Province District Hospital and Inspection Districts QC Supervision Health Center Village Audit NGO TBA Provider Health Committee Population Church VHW Insurance Contract Verification Performance Based Financing

DRCongo South Kivu Pilot Goverment Ministry of Public Health Ministry of Interior Provincial Hospital and Inspection Province District Hospital and Inspection Districts Contract Payment Verification Supervision Health Center Village Audit QC NGO TBA Provider Health Committee Population Church VHW Insurance Performance Based Financing

Burundi Roll Out Government Ministry of Public Health Ministry of Interior Provincial Hospital and Inspection Province Contract Payment District Hospital and Inspection Districts QC Supervision Health Center Village Audit NGO TBA Provider Health Committee Population Church VHW Insurance Verification Performance Based Financing

Expectations • More efficient (lower user fees) • More production • Higher Quality • Better geographical access • Stronger Consumer Participation • More inclusion • Less Morbidity • Better Health Performance Based Financing

Challenges • Access for the most vulnerable (inclusiveness) • Macro-financing (sustainability) • How to adapt to different contexts (flexibility) • How to deal with volatile situations (resilience) • Integration Vertical Programs • Community Participation Performance Based Financing

Get for what you pay Performance Based Financing

Principles and Practices