Performance-Based Financing

A mother and child wait inside a Ntcheu District hospital in Malawi. Photo by Scott McKeown.
The Impact of Performance-Based Financing
Performance-based financing (PBF) is a powerful means of increasing the quantity and quality of health services by providing incentives to suppliers to improve performance. A PBF program typically includes performance-based grants or contracts. MSH has proven that PBF can increase use and quality of health care services, stabilize or decrease costs of these services, help use limited resources effectively, and improve staff motivation and morale (a proven incentive for staff retention).

For more than a decade, MSH has designed, implemented, and supported performance-based financing of health programs to focus on investing in results rather than processes.

The MSH Approach
MSH manages performance-based grants and contracts and provides technical assistance to governments, private organizations, and funding agencies to develop and implement their own PBF initiatives. These programs align with donor requirements and local circumstances, and maximize synergy by sharing tools, approaches, and systems.

What Makes MSH Different
MSH is unique in offering a combination of technical knowledge and practical experience to successfully implement PBF programs; we currently support or recently supported the design and implementation of PBF for health care in 14 countries on three continents.

Many of these programs were designed and are being implemented with technical assistance from MSH PBF programs in other developing countries. For example, members of the Haiti PBF team are working with the team in Liberia to start up a new program. Representatives from MSH PBF programs in Ethiopia, Haiti, and Liberia as well as colleagues from the Ethiopian and Liberian ministries of health attended a PBF training workshop in Rwanda in early 2009.

PROGRESS TO DATE

Social Services for AIDS Orphans in South Africa
Through capacity-building and performance-based grants to 23 community-based organizations, MSH’s Integrated Primary Health Care (IPHC) Project helped more than 19,000 orphans and vulnerable children receive vital services and support in 2008.

Building health programs
In Haiti, MSH has managed PBF programs since 1999. Working through performance-based grants with the public sector and 27 private NGOs, the program supports 152 health facilities in all 10 of Haiti’s departments. The supported facilities provide access to basic health services to nearly half of Haiti’s population.

Improving access to health services
Through a long-term program in Guinea, MSH helped managers of mutuelles—community health insurance funds—and community members develop and implement performance-based agreements for local health insurance schemes. This assistance has improved access to and quality of services without increasing costs.

Fighting HIV & AIDS and strengthening primary health care
MSH has worked with the Rwandan Ministry of Health to implement PBF initiatives that fund services delivered through health centers and hospitals in most of the country’s districts. The project contracted directly with 85 health facilities to finance HIV & AIDS and other services and with districts to monitor indicators of quality of care. The project developed a Web-based system to manage data and process PBF funds, including those from the World Bank, the Rwandan Government, and the Belgian Technical Cooperative Agency. In 2007, the Rwandan Ministry of Health assumed control of the PBF program and made it national policy.