Principles and Practices

04/20/23 Performance Based Financing1

Performance Based Financing

Principles and Practices

Piet VroegProgram OfficerDepartment of Health and Well beingT: +31(0) 703136522F: +31(0) 703136511 [email protected]

CordaidPostal Box 16440,2500 BK The HagueLutherse Burgwal 10 2512 CB The Hague Netherlandswww.cordaid.nl


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).


1. Why PBF?

2. Principles

3. Rwanda Pilot

4. Scaling Up

5. Expectations

6. Challenges


2002 Traditional Financing

INPUT

2003 Performance Based Financing OUTPUT

DIFFERENCE

2003 / 2002

External Consultations 1140 3900 242% Major Surgical Interventions 60 180 200%

Complicated deliveries 336 456 36% Cesarien sections 264 288 9%

Total number of acts 1800 4824 168% Occupation rate (beds) 45% 63% 38%

External Financing by Cordaid $52,000 $17,685 - 66%

Adverage subsidy per act $28.89 $3.67 - 87%

Improvement of Cost effectiveness in 2003 in relation to 2002 = $28.89 : $ 3.67 = 8 fold

We found an 8 fold increase of output with Performance Based Financing

Hospital Miblizi Rwanda


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


Principles


The Principles

More than a contract:

• Separation of Functions• Inclusion of the Private sector (non-profit and for-profit)• Community Participation and Verification


Separation of Functions

Purchaser

Consumer

Provider

Regulator

Legislation

Negotiation

Supervision


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


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)


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


Rwanda Pilot


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


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


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)


Results (Utilization)

Service 2002 2005 increase target % of target

OPD visits in HC p/person p/year 0.32 0.77 141% 0.7 110%

Beddays in HC /pop 1/2349 1/1929 22% 1/1000 52%

Occupancy Rate of beds in HC 40% 53% 33% 100% 53%

Fully vaccinated children 73% 78% 7% 90% 87%

ANC (new cases) 88% 93% 6% 100% 93%

ANC (4 visits=tous standards) 28% 39% 39% 100% 39%

Tetanus toxoid vaccinations as % of pregnant women 42% 63% 50% 80% 79%

Institutional deliveries in HC + hospitals/all deliveries 26% 40% 54% 50% 80%

Contraceptive prevalence in HC (couples) 0.5% 7% 1300% 22% 32%

Referrals to hosp as % of OPD visits 1.6% 2.4% 50% 0.5% 480%

Sale of mosquito nets/100 inhabitants 0 5 30 17%

OPD/MD visits in hosp as % of pop 2.2% 5.8% 163% 5% 116%

Occupancy rate for beds in hospitals 54% 66% 22% 100% 66%

Major surgery (excl CS) 798 1046 31% 1920 54%

Caesarian sections (% complicated deliveries) 898 1200 34% 30% 147%


Results (Quality)

HC Q2 Q3 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12 Total

Bugarama 65% 80% 60% 90% 100% 75% 90% 80% 80% 85% 80.50% Bweyeye 90% 80% 100% 75% 100% 60% 100% 35% 85% 95% 82.00% Cimerwa 100% 65% 40% 90% 90% 80% 80% 45% 95% 30% 71.50% Gihundwe 75% 90% 55% 85% 65% 90% 90% 90% 85% 90% 81.50% Hanika 60% 80% 100% 90% 90% -- 70% 45% 40% 50% 69.50% Kamonyi 75% 75% 90% 80% 75% 75% 60% 25% 70% 85% 71.00% Kibogora 90% 60% 65% 65% 80% 85% 75% 75% 45% 90% 73.00% Mashesha 55% 65% 25% 80% 75% 75% 65% 75% 90% 90% 69.50% Muyange 90% 65% 90% 55% 75% 55% 75% 40% 70% 100% 71.50% Nkungu 90% 100% 100% 85% 90% 65% 85% 90% 100% 80% 88.50% Nyabitimbo 90% 80% 90% 90% 90% 90% 100% 85% 75% 70% 86.00% Nyamasheke 75% 75% 75% 90% 65% 80% 70% 40% 85% 40% 69.50% Ruheru 55% 80% 90% 80% 80% 90% 70% 35% 40% 45% 66.50% Rusizi 55% 55% 20% 90% 65% 65% 85% 80% 65% 85% 66.50% Yove 90% 90% 90% 65% 90% 75% 60% 35% 45% 45% 68.50%

Provincial 76% 76% 72% 80% 80% 74% 74% 61% 76% 72% 74.10%

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%


Results (Financial Access)

Service Old price New price Decrease OPD visit 1241 440 - 64.5% Hospitalisation 2288 1182 - 22.6% Mosquito nets 1123 696 - 49.0% Deliveries 1302 784 - 39.8%

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

Description Old New Change % HH budget spent on health 22% 7% - 214% Costs of OPD visit $2.43 $1.56 - 36% Costs of hospitalisations $12.95 $6.59 - 49% Price is problem to pay 34% 25% - 36%


Scaling Up

or Rolling Out


Pilots

Until now most PBF initiatives have started by an NGO.

There seems to be a pathway of growth

1. Small seed projects with a limited number of services financed with proper funds and executed with traditional partners

2. 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 ).

3. 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)


Overview

Rwanda 2003

RDC 2005

Tanzania 2006

Zambia 2007

Burundi 2007

CAR 2010

Cameroon 2010?


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?


Purchaser

The Purchaser can fulfill several crucial functions:

• Holding the contract• Verification of quantity• Control of quality• Audit• Coaching/Supervision• Payment


Rwandan Pilot

ContractPayment

VerificationCoaching

PopulationProvider

Ministry of Interior

Province

Districts

Village

Government

Provincial Hospital and Inspection

District Hospital and Inspection

Health Center

Ministry of Public Health

Insurance

TBA

VHWHealth

Committee

NGOChurch

Audit

QC


PopulationProvider


Province

Districts

Village

Government



Health Center


Insurance

TBA

VHWHealth

Committee

NGOChurch

Rwanda National System

QCSupervision

ContractVerification

Audit

MoFPayment


PopulationProvider


Province

Districts

Village

Goverment



Health Center


Insurance

TBA

VHWHealth

Committee

NGOChurch

DRCongo South Kivu Pilot

QC

Audit

ContractPayment

VerificationSupervision


PopulationProvider


Province

Districts

Village

Government



Health Center


Insurance

TBA

VHWHealth

Committee

NGOChurch

Burundi Roll Out

ContractPayment

QCSupervision

Audit

Verification


Expectations

More efficient (lower user fees)

More production

Higher Quality

Better geographical access

Stronger Consumer Participation

More inclusion

Less Morbidity

Better Health


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


Get for what you pay

Principles and Practices

Documents

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