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By Dr. Fuein Vera Kum (Download PDF)

Performancebased Financing in the Healthcare Sector: Challenges, opportunities and prospects.

Introduction and background

Performance-based financing (PBF) aims to improve the delivery of health services by providing bonuses to service providers based on an audited quantity of outputs produced and modified by quality indicators. These bonuses are often equipment, but usually with some portions paid to individual staff [1]. It is a well-structured health system intervention aimed at improving coverage and quality of care.

At the beginning of the millennium, universal health coverage was the key reform envisaged by many researchers, practitioners and policymakers. It was seen as the overarching goal that would shape health sector reform in low- and middle-income countries (LMICs). Since then, mechanisms to improve coverage and access to quality health services have been reformed by global actors as part of a global effort to achieve UHC [2].

Performance-based financing is a typical example of continuous reframing. It is a health system reform that shifts from an input-based to an output-based purchasing approach. Of the 46 countries in sub-Saharan Africa, 32 had already signed up to the policy framework as of June 2017 If we want to assess the extent to which this health policy framework is being practiced in Africa, it is certain that we will assess not only its implementation process and impact but also how it has gained traction at the global, intercontinental, and national levels.

Research Evidence: challenges, opportunities and prospects.

Research shows that PBF in Cameroon is an efficient mechanism to pay and finance providers, leading to a remarkable increase in the use of PBF for many services, including child and maternal immunization and the use of modern family planning. In terms of quality, PBF has been shown to have a significant impact on the availability of basic supplies and equipment, qualified health workers, and increased patient and provider satisfaction [4].

Similarly, a qualitative research study on the impact of PBF on the availability of essential drugs in Cameroon found that it improved the perceived availability of essential drugs in Cameroon in three regions. The study also found that the change in the availability of essential medicines as perceived by stakeholders was due to multiple sources, including the increased autonomy of facilities, the enforcement of laws by the district medical team, the increased accountability of the pharmacy attendant, and the liberalization of the supply system [5].

In another interesting study examining the implementation of the PBF equity strategy in improving access and utilization of maternal health services in Cameroon, it was reported that the consistent provision of care to the poor and vulnerable had a negative relationship with the delay in payment of PBF incentives, which was the main challenge. This is especially true for private health facilities [6].

Similar to the issue of delay in payment of PBF incentives was the difficulty in having a common understanding of the definition of poor and vulnerable among different stakeholders, including providers and users, as well as how the poor and vulnerable are operationalized (structured). There was also the problem of appropriate and on-time payment of incentives to healthcare providers and facilities.

Another disturbing factor or challenge in the implementation of the PBF equity payment strategy is associated with the difficulty in ensuring that there is adequacy and rationality in the distribution of resources, as well as being able to accurately figure out those who are in more daring need compared to others, especially health facilities in the peripheral areas.. Meanwhile, health facilities in urban and more affluent areas receive less incentive because they are not considered as poor as those in rural areas. The issue here is to assess whether these resources are rationalized equitably without bias and the tendency to cheat following the corrupt nature of public sector workers in Cameroon [7].

A general review of the literature on PBF reveals not only poor evaluations and questionable study designs but also numerous other shortcomings. Some of the likely negative effects that financial incentives can have on health worker performance and motivation include distortions – focusing on targeted services to the detriment of others; negative reporting; selection of patients who make it easier to achieve goals; sacrificing quality of services to focus on quantity because it is practically easier to implement and control. It also contributes to widening disparities by rewarding providers and centers that are better able to meet targets and the temporal improvement of services that stop as soon as the target is met.

In terms of the opportunities that arise after the implementation of PBF equity design, poor people, who are mostly located in the periphery, can also benefit from health services. In the past, it was very difficult for people in the interior of the country to access health services, especially for women who needed antenatal and postnatal care, which is one of the causes of high infant mortality in Africa [8].

Since PBF is evaluated based on a predetermined quality of service and output, it provides an opportunity for those who work hard and strive to achieve good results in the course of performing their duties. In this regard, their incentives are based on the quality of the services they provide. Since funds are also allocated for the purchase of good equipment and training in its use, positive results and greater output are eminent, thus benefiting both parties [Ibid].

Performance-based financing has many prospects and advantages. One such advantage is that it can promote financial and managerial autonomy and accountability in service delivery. PBF helps promote good governance by strengthening existing structures and mechanisms [9].

PBF is also effective and profitable because it benefits the service regulator, health workers and patients. This means that its holistic nature helps to improve the living conditions of the entire community. A Congolese doctor in Pointe-noire reports that since the introduction of PBF, patients have noticed significant improvements: service delivery is friendlier, treatments have improved, and information campaigns have been expanded [10].

According to the same source on PBF that explored a win-win perspective for health workers and patients alike in Congo, one worker reported that the implementation of PBF has clearly allowed them to improve the quality of care in their center, which has increased the number of patients from 60 to 180 per month. In general, healthcare providers affirm the implementation of PBF in their centers, which they believe could mean more financial resources if their performance meets the required standards [ibid].

3. Recommendations

Despite the fact that PBF has come along with some changes and prospects in the health sector, it still has some underlying problems that affect its expected objectives. The following policy recommendations are considered helpful to improve its effectiveness.

  • Since there is a lack of focus on the quality of services produced, it is advisable to ensure a more stringent performance evaluation mechanism. This will help to rebuild performance awareness and work ethic, leading to better quality of services while providing incentives to staff.
  • It is advisable for the Government of Cameroon to reconsider a more robust good governance approach that includes inclusiveness, transparency and accountability in the PBF implementation process. This will help to ensure equity in the allocation of bonuses to service providers and financing to health facilities. It will also promote more appropriate management principles that take transparent financing and budgeting into account.
  • It is also advisable to fund and conduct more research on performance-based financing, as the debate surrounding it is mainly supported by unsubstantiated and insufficient evidence that does not sufficiently consider the context of the PBF package or disentangle its various elements.

Dr Fuein Vera Kum is a Research Fellow at the Nkafu Policy Institute. She joined the institute as Economic Policy Analyst in 2017 with a focus on health economics and development policy. She holds a Ph.D in Economics from the University of Benin, Nigeria.