The Health Impact of Performance-Based Financing in Rwanda

The Health Impact of Performance-Based Financing in Rwanda

At the First Global Symposium on Health Systems Research in Montreux, Switzerland in November, Dr. Yogesh Rajkotia, of USAID Rwanda, moderated a panel discussion noting that Performance-Based Financing (PBF) is an effective health systems strengthening strategy. The presentations were made on behalf of the Rwandan Ministry of Health with the guidance of Dr. Agnes Binagwaho, Permanent Secretary.

In 2000, Rwanda’s health system was perceived as weak: there were human resources shortages, especially in rural areas; poor quality of services; and a high morbidity/mortality rate of women and children. Since 2001, Rwanda has committed itself to better health and to pushing for achievement of the Millennium Development Goals (MDG) by 2015.

PBF is a powerful means for increasing the quantity and quality of health services by providing incentives to health providers to improve performance. A PBF program typically includes performance-based grants or contracts. Health clinics and their staff are rewarded for reaching or exceeding health indicators.

Dr. Louis Rusa, Director of the CAAC in Rwanda (Centre d’Appui del l’Approche Contractuel), outlined the policy decision that led to the three PBF pilot programs undertaken in the area around Kigali, Rwanda. With project support from USAID, the PBF Project, implemented by MSH, undertook activities to set a national PBF program supporting all health service sites. Dr. Rusa, who guided this process, discussed the range of policy decisions and mechanisms that were used to assure collaboration, transparency, and accountability. PBF has led to greater efficiency, improved (and still improving) quality of services, and has helped achieve health coverage for 99% of Rwandans.

Dr. Kathy Kantengwa, MSH’s Principal Technical Advisor for Performance-Based Financing, provided a detailed overview of the design of the national PBF system and how it operates to influence national health indicators---in particular progress toward MDG 4 and 5 (reducing child and maternal mortality). She noted the upward trend in results and impact for women and children, in particular increases in volume of maternal, newborn, child health services and antenatal care.

At the outset of the national PBF program, managers reported data without validation and some reports were suspected of being exaggerated to create a more positive picture than might have been accurate. In this critical period of the program, the Minister of Health and Permanent Secretary made it very clear to all unit leaders in the network of health system managers that accuracy was the goal, not numbers. They acknowledged that strict accuracy might reduce some current figures and trends and that this adjustment (to reality) would be seen as a positive sign.

Dr. Cedric Ndizeye, the Finance Systems Advisor in USAID’s Rwanda Integrated Health Systems Strengthening Project

 Dr. Cedric Ndizeye, the Finance Systems Advisor in USAID’s Rwanda Integrated Health Systems Strengthening Project (IHSSP), discussed the process of health indicator choice and payment structure in Rwanda’s PBF program. He presented analyses on how they had crucial impact on revenues received at health centers, motivated access to quality services for the people served, and allowed the Government of Rwanda to actively manage its investments in pursing national health goals.

David Collins, MSH Director of Finance, made a presentation on the impact of PBF on the cost of health center services.  Six health centers were analyzed over a period of 3 years using an activity-based costing model called CORE Plus. One of the main findings was that, while PBF is expected to reduce unit costs in the long-term by increasing productivity, unit costs may actually increase in the short term when services have previously been underfunded---as salaries rise to appropriate levels, missing equipment and supplies are purchased, and facilities are upgraded.

This session was very thorough and informative. In the final conference plenary it was recognized as one of the highlights of the whole conference.

Read more information on Rwanda’s PBF plan or watch this video:

John Pollock is a Senior Fellow in the Center for Health Services at Management Sciences for Health.