Programs that directly finance frontline facilities can support impactful health financing reform
WASHINGTON, May 11, 2022 – Funding medical care projects in low- and middle-income countries with Performance-Based Financing (PBF) increases the number of patients treated but often falls short of improving the quality of health services offered, according to a new World Bank report.
Direct financing of frontline facilities may play a more important role in supporting impactful health financing reform, according to the Policy Research Report Improving Effective Coverage in Health: Do Financial Incentives Work?
“There are more than six million deaths from preventable causes each year,” said Carmen M. Reinhart, World Bank Senior Vice President and Chief Economist. “We need to focus on making sure people across the developing world have access to the quality medical care they need to prosper and achieve their full potential.”
PBF is a package intervention which relies on performance pay to health facilities and workers, with payments linked to the quantity and quality of services they deliver. It also includes autonomy, accountability, and community engagement. Government bureaucracies the world over deploy performance pay across sectors including education and health. Over the past two decades, PBF programs have been widely adopted in health with the aim of improving the stubbornly poor health outcomes in low- and middle-income countries despite sustained investments in health service delivery and service utilization. Since the late 2000s, more than US$2.5 billion has been invested in PBF projects in primary health service delivery in low-income countries, a significant departure from previous financing models, which had little link to outcomes and results.
The report finds that PBF projects produced gains in health outcomes compared with the status quo, although these gains did not necessarily result from the specific financial incentives and associated monitoring components of projects. Whereas transparency, accountability, and direct frontline facility financing produced results, the evidence from countries like Cameroon and Nigeria does not show additional benefits that outweigh the costs of performance pay to frontline workers. This is because many aspects of quality-of-care improvements are well outside the control of health workers. Evidence from several sub-Saharan African countries shows that only a third of the factors behind poor quality lie within the control of health workers, meaning the performance pay alone is not a silver bullet in this context. For example, a Nigerian program that directly funded facilities and supported autonomy and flexibility was half the cost but proved to be as effective as program that supported autonomy and flexibility, as well as including performance pay.
Impactful health financing reform might mean pivoting from performance pay while retaining other important aspects of PBF projects that do yield similar results. Health facilities can deliver better results when they have budget autonomy, flexibility, and unified payment systems, and health facilities’ budgets can be output oriented and impactful even without explicit performance pay.
The report focuses on the best policies to support effective coverage, a measure that adjusts simple coverage of care with the quality of care provided. The study covered millions of households and found that equitable access to affordable health care is not a reality for many women, men, children, and adolescents in the developing world. This is true both for basic services, such as maternal and child health, as well as for services aimed at preventing and treating the emerging threat of noncommunicable diseases.
Estimates of effective coverage and its two components for six conditions (pregnancy, child malaria, child diarrhea, hypertension, tuberculosis, and HIV) using household survey data establish that effective coverage—and by extension, quality of care—is currently still shockingly poor for many health conditions in many environments.
Performance pay may make sense in decentralized, high-quality health systems that already support facility financing and autonomy as well as accountability and transparency. However, its potential may be more limited in centralized, under-resourced health systems that have key gaps at various points. In addition, performance pay can incentivize the provision of inappropriate, unnecessary, or irrelevant care.
“At a time when COVID-19 pandemic has increased mortality and morbidity and caused severe disruptions to routine health services, it is extremely important to focus on the most effective reforms to improve access to high-quality health care,” said Mamta Murthi, World Bank Vice President for Human Development. “This is an unprecedented opportunity to rethink the way countries build health systems, finance them, and deliver services towards the goal of health for all.”
A Panel discussion with the report authors will take place on May 11, 2022, 10:00 – 11:30AM EDT. It will be available to WATCH LIVE ON YOUTUBE and a recording will be posted afterwards on the event webpage.
