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POLITICAL ECONOMY AND BUDGETING OF RESULTS BASED FINANCING

POLITICAL ECONOMY AND BUDGETING OF RESULTS BASED FINANCING . Claude SEKABARAGA , MD, MPH The World Bank/AFTHE/HSO/ Nairobi Hub. Claude SEKABARAGA , MD, MPH The World Bank/AFTHE/HSO/ Nairobi Hub. Questions. Which are economic, budgeting and financial management and reporting implications?

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POLITICAL ECONOMY AND BUDGETING OF RESULTS BASED FINANCING

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  1. POLITICAL ECONOMY AND BUDGETING OF RESULTS BASED FINANCING Claude SEKABARAGA, MD, MPH The World Bank/AFTHE/HSO/Nairobi Hub. Claude SEKABARAGA, MD, MPH The World Bank/AFTHE/HSO/Nairobi Hub.

  2. Questions • Which are economic, budgeting and financial management and reporting implications? • Which are the cost of outputs and outcomes issues?

  3. The economic implications of RBF: Expansion of health sector market • Government sell and buy to government: Matching public services provision and private management principles; • Public Private Partnership: Public providers can either sub-contract private, either partner in performance contracting; • Development of labour market within public sector: Increase quantity and quality of public human resources.

  4. Private spending increasingly exceeds public spending in SSA (Agnes Soucat)

  5. Creation of market for government health providers • The clarity created by the market can increase: • Efficiency: If weakness is somewhere, it will be easy to identify it; • Sustainability: The capacity of public providers is used for gathering private resources either through services (Quality of care) or through partnership with private sector;

  6. Public private partnership for health sector and labour market • The catchment area providers (public, private non for profit and private) can partner for a performance contract with government: Resources from those providers will be match, capacity will be improved with the existing means; • Especially, the market will allow sharing of available HRH (Short term performance will allow public and private sharing of resources).

  7. The budgeting implications of RBF • Results based v.s item budget line: As budget program or sub-program, RBF can be easily designed. But at the level of budget lines, which is mostly the basis of budget execution and public financial management procedures, this is an important issue to clearly clarify and have common understanding.

  8. The financial management and reporting implications • The classical reporting and auditing of financial resources are the procurement, storage and utilization (services) of inputs; • A “BLACK BOX” appear somewhere and it can be a problem for public resources; • The new is: The budget is result based, but reporting and auditing go in the black box for entire management.

  9. Costing and Budgeting modalities Performance investment: Sub-contracts, equipment, consumables and Drugs. Results Based Financing Personnel incentives for more quantity services and more quality

  10. Costing and budgeting of results issues? • The level of incentive signal: The incentive payment is not a right like salary, but staff expectation. If you perform, you can get X resources: • The budgeting need more mathematic calculation and the costing of incentive signal is somehow subjective; • Budget is based on available resources, when for RBF if incentives are not so strong, RBF has no sense: Gap in financing results is critical than inputs financing.

  11. Where to start? BUDGETING THE COMMON RBF MECHANISM There are two choices: • The fee for individual output or outcome; • Payment of marginal performance: Madagascar. The both generates facility financial resources which will be used for individual staff incentives and performance investment.

  12. RBF: What to pay, what to budget for? • The common practices: Human resources financial incentives and some investment and consumables include drugs: Afghanistan, Cambodia, Rwanda, DRC, RCA, Cameroun, etc.; • The mix of services payment mode and incentives: Burundi; • The investment and consumables: Eritrea. • The non financial incentives for direct human resources (Facility staff): Ethiopia.

  13. The RBF budgeting as “art” The signal

  14. The RBF budgeting as “science”

  15. The RBF budgeting as “art and science” (MBB for example)

  16. The RBF budgeting as “art and science”

  17. The RBF budgeting as “art and science”

  18. The macro estimation • Subsidies for the health facilities: $ 2.20 (73%); • Monitoring of output, technical assistance, overhead fund holder: $ 0.55 (18%); • Regulatory functions at provincial and district level $ 0.25 ( 8%) • TOTAL per capita / year: $ 3.00 (100% NB: The RBF is complex and need mix of science and art.

  19. Conclusion • Results Based Financing has implication on economy, especially the public financing efficiency, the expansion of health market; • Mind change is necessary for public budgeting and financial management; • Budgeting change of behavior is not easy, but approaches were developed with mix of science and art; • Monitoring of the relationship between the level of incentives financing, the level of staff engagement and the health outputs and outcomes is the KEY.

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