The all important details: How to operationalize the

RBF system

Monique Vledder

World Bank

June 2008

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

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

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

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

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?

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

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 formulaMaximize managerial autonomy Be clear and transparent when negotiating contracts

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

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

Evaluate and revise contract terms

Ongoing monitoring system informs RBF managers who revise programs

Iterative rather than linear process

PBF within the context of:

Donor rules

Government restrictions

National regulations for providers

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!