Results-based financing shows a new way of doing health care

Health clinics in low- and middle-income countries are increasingly finding that good work can pay off.

Known by a number of names, including results-based financing and performance-based incentives, this health financing mechanism has a simple premise: To reward health service providers — often with money — for positive results. This should lead to even better outcomes for providers and patients alike.

“RBF links monetary and nonmonetary incentives with performance against quality and outpost goals at every level of the health care system, with an emphasis on local management and clinical care providers,” explained Jean Kagubare, global technical lead of health care financing for the international global health nongovernmental organization Management Sciences for Health.

Financing agreements vary, but typically money flows from developing partners — or, in other cases, from national governments — to health clinics, which receive funds based on a formula that considers the number of delivered health services, among other factors.

If a health clinic meets certain quotas for in-house deliveries and immunizations, it could potentially increase its annual budget by 10 to 20 percent of employees’ pooled salaries. External donors could also directly funnel money to governments, from local to national governments, in addition to other payer-recipient combination schemes.

Shift towards RBF

It’s a general financing strategy that leading donors such as the World Bank have shifted towards in recent years, with the organization increasing the number of countries operating RBF-projects from three in 2006 to 32 today. The World Bank administered Health Results and Innovation Trust Fund, backed by Norway and the United Kingdom, is now planning to merge with the organization’s Global Financing Facility, a partnership aiming to close the $33.3 billion funding gap on women, newborn and children’s health by 2030.

Dinesh Nair, senior health specialist at the World Bank, spoke of a “dysfunctional health delivery” visible throughout many of the fragile countries and inaccessible areas the organization operates in and funds.

“Nobody is coming to visit and supervise their [staff’s] performance … the quality of these services is very poor, so clearly improving the performance of the systems and health facilities has become very critical,” Nair said.

The Health Results and Innovation Trust Fund is working with a total of about $3 billion in grant financing, set to be invested in RBF programing — focused on maternal, newborn and child health — until 2020.

Some experts who track various RBF programs say that the lure of financial compensation and other forms of professional recognition can make health care providers more motivated. Yet the question of how financial incentives trickle down to result in better, more accessible care for patients remains somewhat elusive.

“Measurement is a real challenge, as is assessing how to do that in a cost-effective way,” said Rena Eichler, founder and adviser of the consulting group Broad Branch. The organization consults with a number of organizations on implementing RBF.

Struggle to assess quality

The TRAction Project, a U.S. Agency for International Development-funded initiative, supported a landscape analysis of 32 RBF programs in 26 countries — mostly in Africa, but also in Central, South and East Asia — from April 2015 through March 2016.* The accurate assessment of quality care was a common issue, says Samantha Ski, the organization’s technical adviser.

“A lot of programs are struggling with that … the thinking is that there is a need for more proximal determining factors,” she said.

Quality could be measured by a researcher observing a health care provider at work directly interacting with patients, or by collecting patient records, she suggested. But these types of measurements could be costly, or complicated to conduct.

Early project models for RBF, dating back to the late 1990s, did not consider quality as part of their measurements of success, said Broad Branch’s Eichler. This is beginning to change, she said, as evidenced by the introduction of a “unique, rare” initiative in Latin America that she said shows a marked evolution in the field.

The Salud Mesoamerica Initiative, a public-private partnership backed by the Inter-American Development Bank, is directly reaching 1.7 million women and children through its support of 1,100 health clinics in eight countries, including Mexico, Guatemala, El Salvador and Panama.

“On average, in Mesoamerica, we have been doing OK when it comes to health targets, but when you disaggregate that data, the problem is how the poorest are being marginalized and don’t have access to health services,” said Emma Iriarte, executive secretary of the Salud Mesoamerica Initiative.

The organization, operating for 18 months, is working with $155 million to reach the poorest 20 percent in these countries. Health clinics are guided by specific, quality-focused indicators such as the effectiveness of vaccines, based off of blood antibody levels and percentages of postpartum hemorrhages following deliveries.

The organization is in the process of analyzing clinic data, but Iriarte says some results are already clear.

“The clinics do faster, better work,” she said. “If you ask how strong the incentive is, we don’t have an answer for that. But I can say, even if the funding for each initiative is not that big, the huge difference is they do have the incentive. We have heard from meetings with the eight countries that there is a sentiment that no one wants to be left behind.”

In Senegal, which independently launched a government-funded RBF pilot project in 2012, health providers have expressed similar sentiments, according to Marty Makinen, a managing director for the global nonprofit Results for Development Institute.

Makinen recently led a study, which considered quality of care and how the USAID-backed financing program impacted health personnel’s behavior. He said checklists that monitor providers’ work are “motivating,” but do not necessarily result in follow-up steps for correction or improvement.

“In the results-based financing areas people described supervisors coming in and asking, ‘Are you doing this and that,’ but there is little help when it comes to actually solving problems, or going over scores,” Makinen explained. “They are not getting the help and they wanted that. This is an important finding and can let the Senegalese know that they need to work on the supervision side. There is a hunger for information.”

Competition — driven by the understanding of peers’ scores — is also another factors providers are considering, Makinen said.

“We are sort of both confirming the adage that if it is measured, you are more concerned with the product than if it is not measured,” he said. “People take pride in where they stand.”

The World Bank’s Nair said that while monitoring is critical, measuring quality is an “evolving area.” The organization’s progress report last year highlighted quality of care in countries such as Nigeria and Cameroon, where a pilot is being implemented at more than 400 clinics. The average quality of care score increased 43 percent to 63 percent between 2012 and 2015 in areas covered by the pilot project.

“In terms of measurement and tracking implementation, performance, monitoring is the fundamental heart of the program. You have to measure what is being delivered to determine if the results are being achieved,” Nair said. “But it is much easier to get quantitative results. Quality measurements requires a much more detailed way of measuring work.”

Thinking long term

RBF programs will continue to roll out, as the initiatives tend to focus on results, rather than inputs, according to MSH’s Kagubare — priorities held by both donors and host countries.

Aside from the issue of measuring quality, long-term sustainability could be one other challenge in expanding this work.

“Currently, most of the funding is provided by external donors,” Kagubare told Devex in an email. “Countries should take a leadership role, including the funding. There is no halfway with RBF … the transition to RBF requires a fundamental shift in the way people think about health financing in developing countries.”

* Update, October 3, 2016: This story has been updated to clarify TRAction’s role in the landscape analysis of 32 RBF programs.

Making Markets Work is an online conversation to explore what’s being done to make global health care markets accessible to people at the base of the pyramid. Over 10 weeks, we will amplify the discussion around effective health financing, analyze key challenges blocking universal market access in the health care supply chain, and explore the key strategies to make markets more effective. Join us as we look at this important issue, and share your thoughts by tagging #MakingMarketsWork and @Devex.