Results-based financing

1. Results-based financing Why? What? How?

2. Jagaman district just erected a new health center and the health workers have started work.What are health workers doing? What motivates them?

3. What about mothers? Are they all coming to the facility and demanding services?

4. Would financial incentives and recognition motivate health workers to behave differently?

5. Motivation and Flexibility • People are motivated by internal forces • Professional pride • Desire to help others • And by external forces • Money • Recognition such as awards • If well designed, results-based financing reinforces the professional pride (internal motivation) with money and recognition (external motivation) • Incentives matter - If a person has motivation and flexibility to overcome problems, major improvements can be achieved

6. PAYOR Health Results Financial Incentives RECEPIENT Household Individual Facility Sub-national What is RBF? Cash or goods provided against measurable actions or achievement of a defined performance target • Incentives targeting the service provider’s behaviour (individual, facilities or sub-national levels) • Incentives targeting community, household and individual behavior

7. Results-Based financing If designed well RBF can provides incentives to key actors to change behaviour and achieve health results. • Increase use of services by overcoming financial, physical or information barriers • Strengthen capacity to provide services • Motivate health workers • Catalyze changes that strengthen management. • Improve information systems and use of information for decisions • Improve quality by rewarding correct diagnosis and treatment • Improve efficiency through better use of inputs to achieve health results

8. RBF Mechanisms • There are several mechanisms and ways to structure these mechanisms. There are even more names for each mechanism and it can be confusing. This workshop focuses on those mechanisms using incentives to change behavior • Pay for Performance (P4P) • Performance-based Financing (PBF) • Performance based Incentives (PBI) • Output-based Aid • Fee for Services • Vouchers • Conditional cash payments • Conditional cash transfer • Contracting

9. RBF Mechanisms • Many mechanism and names. This workshop focus on those using incentives to change behavior • Pay for Performance (P4P) • Performance-based Financing (PBF) • Performance-based Incentives (PBI) • Output-based Aid • Fee for Services • Vouchers • Conditional cash payments • Conditional cash transfer • Contracting Service provider paid a bonus if they achieve agreed target Service provider paid a fee for each service delivered (Rwanda) Voucher to consumer for free health services or packages of services. Provider paid when remits vouchers. Voucher to mother entitling them to cash or in-kind payment when utilize service Payment to consumer conditional on using health service Welfare transfer to household conditional on use of social services (education, health) Legal agreement governing terms of payment

10. Results-based financing can be used at any level but it must trickle down to the point of contact between the provider and household to impact results Donors National Government Sub-national Region/District Results Based Aid Results Based Budgeting and Financing Results Based Financing CCP, CCT, RB bonuses Providers Health Centers Hospitals Households or Individuals

11. Design Elements RBF Agreed target group who will be motivated by incentives to increase supply or demand of agreed health interventions Agreed indicators for desired action Attendance at birth by skilled professional; full immunization Agreed target for the indicator Population-based vs. quantity vs. per output Agreed type and level of reward for results Bonus for health center for 10% increase in number of attended births; Cash to a mother if she delivers baby in a facility Agreed means of measuring and verifying progress Self-reporting Institutional records confirmed by periodic random audits Financing system to assure timely provision of rewards

12. Questions to consider • What is your maternal and child health goal? • What interventions should be ramped up? What is the problem now? • Population not demanding the service? • Service not provided? • Quality of service is poor? • Will incentives help fix the problem? • Funds to families/mothers – nationwide or target poorest? • Rewards to motivate more services or better quality services in public sector, NGOs, private sector? • Incentives to both families and service providers? • Could the selected incentives create a new and different problem?

13. Questions to consider • What systems are needed to implement RBF successfully? • Does the regulatory framework require change? • How will results be routinely monitored (HMIS?) and verified? • How will rewards be paid out – fiduciary system? • How will contracts be designed, written and awarded? • In long run, how will the government and donors assess if the RBF scheme was successful? How will the government decide if it will continue funds going through this scheme? • How will you show impact? • How will you show cost-effectiveness? • How will you show if it should be modified or expanded?

14. RBF is exciting because incentives are powerful. RBF requires careful design and implementation to achieve desired results.