Emerging schemes are challenging the way Western (including Belgian) aid in the health sector has been organised in low- and middle income countries. Bruno Meessen, Professor of Health Economics at our Institute, has co-authored a recent book on Performance Based Financing (PBF), a powerful strategy which has successfully been implemented, among others, in Rwanda, Burundi and the DRC.
Performance Based Financing in a nutshell
Performance Based Financing (PBF) is a strategy which links the funding of health facilities to a verifiable performance. Performance is related to services that are delivered to people, e.g. number of vaccinated children or the number of deliveries in the health centre. It is the performance of the health centre, which is remunerated, not the inputs (like building, equipment, staff or drugs, like in a classical development project). The strategic role of fixing the fees for the services is fulfilled by bodies of the ministries of health. The aim is to empower these funding bodies so that they assume the active role of strategic purchasers as opposed to the more passive of budget providers. Verification of the due delivery of the paid services is entrusted to an independent third-party.
Paying outputs has, to some extent, been used in Western-European countries for decades. The key novelty is its adaptation to work in low income countries (LICs), where under-utilization and under-provision of life saving services is an issue. PBF does it in a way that gains can be maximized and the possible side effects can be limited. In the past 10 years the strategy has been endorsed by a growing number of countries and it is supported by the biggest aid agencies, such as the World Bank, Global Fund, the GAVI-alliance or UNICEF.
According to Professor Meessen, who has been heavily involved in designing, implementing, promoting and documenting the strategy, PBF has many benefits.
“First of all, you ensure good value for you money, as your transfer of resources is conditioned on results directly valuable to the population. This is the main reason why aid agencies but also ministries of finance of low-income countries like it. Health staff appreciate the fact that the strategy recognises their creativity and entrepreneurship. They accept the logic of the scheme – more uncertainty of income and requirement to work harder, as they know that performance is rewarded. Health facility managers appreciate the greater autonomy they are granted: they can decide what to do with the money, instead of having to accept for instance donations in kind. The strategy seems also a nice way to prevent embezzlement of resources, as payments go directly on the bank accounts of health facilities.” said Meessen.
In the past decade the involved actors have built up vast expertise with PBF in Central Africa, namely Rwanda, Burundi and the DRC. (Have a look at the maps on the rapid expansion of PBF programmes in Africa between 2006 and 2013 – in Rwanda especially PBF proved to be an unprecedented success.)
The toolkit was developed by people working in the field and came into being as an answer to the clear need to systematise the experience-based knowledge that until now only existed in the minds of experts. The final product of this rigorous process is intended for practitioners who want to introduce PBF in their country and are in need of specific guidelines. As the authors put it: “it attempts to capture the current state of affairs and best practices, while attempting to keep abreast of by updating the methods, experiences and tools used.”
The book (and accompanying CD full of supporting documents) bears the fingerprints of Belgian and Dutch experts; it was authored by a trio consisting of World Bank expert György Fritsche, independent public health and health financing specialist Robert Soeters and ITM researcher Bruno Meessen.
A radical change
PBF fundamentally questions the way aid in the health sector is distributed, which is a controversial notion to many. PBF supporters argue that by helping the ministries of health to enter into contracts with health centers (regardless of their affiliation, may they be private or public), they create a climate in which the local managers feel empowered—thereby deeply transforming how health systems are operated in LICs. The strategy also questions the actual contribution of intermediary actors, including some northern aid agencies which have spent decades of efforts in so-called ‘capacity building’, not always with clear measurable impact.
PBF has been in place for a decade now in some LICs. The strategy disseminates very quickly.
UN Secretary General Ban Ki-moon, whose multi stakeholder partnership, Every Woman Every Child, is sparking important gains, said: “Innovative approaches to financing are urgently required to meet the health needs of the world’s women and children. Results-based financing [umbrella term that also encompasses PBF and other related strategies] can improve the quality and efficiency of services and, just as important, enhance equity.”
- More info on the World Bank’s website
- Download the full text of the Toolkit
- Check the Health Financing in Africa blog for updates on PBF
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