The all important details: How to operationalize the RBF system

1. The all important details: How to operationalize the RBF system Monique Vledder World Bank June 2008

2. Learning Objectives • To understand roles needed to operationalize a RBF system • To understand options for structuring supply and demand side RBF programs • To consider: • What entities will manage the process • How you will operationalize the necessary functions • Needed staffing • Needed systems

3. Types of functions to be performed • Design and implement strategy for chosing recipients • Design performance agreement/contracts • Negotiate performance agreements/contracts terms • Establish reporting procedures • Monitor performance (routine) • Audit and verify performance • Generate and execute payments • Evaluate and revise agreement terms Develop an implementation plan

4. Some options for “who”… • Government Ministries (Health, Social Affairs) • Social Insurance Agencies • Community Based Health Insurers • Agencies established explicitly for this purpose • School of Public Health • NGOs • Donors Some functions can be contracted out: • Lead agency still needs to manage the contract • Examples: • Performance verification • Distribution of cash transfers to households

5. The detailed attention to the “How” • A different approach: More monitoring and data quality assurance, less attention to accounting for every penny • Need for capacity and systems strengthening • Budget implications Might need adjustment period

6. Manage bidding process (Supply Side) • Decide whether you want to use competitive process • Steps for the bidding process: Select criteria Design Request for Proposal (RFP) Bidders conference/meeting Evaluation criteria and evaluation team • What to do with poorly performing providers?

7. Design and implement targeting strategy (Demand Side) Challenge: Large number of transactions implied when paying individuals Important to: • Define and communicate clearly eligibility criteria • Track enrolled beneficiaries • Collect information about the services they use and compare rates with what is required • Monitor potential unintended effects • Transfer cash to large number of people • Assure fraud and misreporting are minimized

8. Design and negotiate contracts and establish reporting procedures • Recipients responsibility • Payer’s responsibility • Process for dispute resolution • Reasons for termination • Contract duration • Others (specific to RBF): performance targets and how they will be measured and validated, payment terms that link payment to results, reasons for termination, specific reporting requirements. Explicitly define payment formula Maximize managerial autonomy Be clear and transparent when negotiating contracts

9. Performance monitoring Involves: • Tracking and validating of performance measures • Monitoring both intended and unintended effects • will most likely involve investments in systems to monitor at the payer and service provider levels Independent verification versus self report Verifying and auditing performance

10. Generate payment in a timely fashion • 2 Payment mechanisms: guaranteed payments and the payments linked to results • Payment System needed • Demand versus supply side incentives

11. Evaluate and revise contract terms • Ongoing monitoring system informs RBF managers who revise programs • Iterative rather than linear process

12. PBF within the context of: • Donor rules • Government restrictions • National regulations for providers

13. Main ideas • Devote ample attention to the capacity and systems needed to implement PBF programs: the “Who” and the “How” • Take into account budget implications • Monitor and revise on a ongoing basis THANK YOU!