When results-based financing (RBF), or in particular, supply-side pay-for-performance schemes, became the new “it-girl” in health financing, some of us looked on with a bit of amusement because what we knew as health care provider payment was dressed up in sexy, new clothes. We were all familiar with RBF programs, such as those in Rwanda and Burundi, which brought incentives and accountability to health systems devastated by conflict or other crises. But was this approach relevant to countries, like Ghana and Kyrgyzstan, that have health purchasing and provider payment systems that are already relatively mature? The amusement morphed into a conceptual divide as a number of new RBF pilots emerged that seemed either to ignore, or in the worst cases, go against, these existing, health-purchasing arrangements. On closer examination, the problem is not so much conceptual (for example, in the details of design), but rather it is a problem of applying a one-size-fits-all approach to RBF for countries at very different stages in the development of their health purchasing functions.
Recently at the RBF Inter-Agency Working Group meeting in Geneva, a group of RBF enthusiasts and a few skeptics took on this issue of how we can better leverage RBF to strengthen health purchasing in countries at different stages of health sector development. We rallied around the motto provided by the WHO’s Joe Kutzin: “From scheme to system.” The group agreed that RBF can play a helpful role whether a country’s health purchasing function is weak with little strategic power, or more mature with more sophisticated provider payment systems that may need a little tweaking to better align incentives with objectives. The main requirement is doing good diagnostics to understand what performance problems need to be solved and whether and how RBF can help solve those problems through better and more strategic health purchasing.
My colleagues, Peter Smith of Imperial College, and Michael Borowitz of OECD, and I shared the findings of a review we did of pay-for-performance (P4P) schemes in 11 OECD countries that will soon be published as a book by the OECD and the European Health Observatory. The main finding of this study is that P4P did not lead to “breakthrough” performance improvements in any of the countries. But the schemes did contribute to a greater focus on health-system objectives, better generation and use of information, more accountability, and in some cases, a more productive dialogue between health purchasers and providers. This also can be described as more effective and more strategic health purchasing.
In addition, our study points to what looks like a pathway, or evolution, of health purchasing and provider payment that may help us think about the role RBF can play in moving countries along the path to more strategic health purchasing. On the other hand, from our study we think that if RBF programs do not help this movement, they are in danger of remaining as schemes—expensive and probably not sustainable.
So what does this pathway look like? In the earliest phase there is little use of strategic purchasing in the health sector. Of course there is health purchasing—money goes into the system and services are delivered—but there is little connection between the two. Countries in this phase may be recovering from crisis or post-conflict situations and suffer from low-productivity and low-utilization. RBF programs in this phase give incentive payments to providers based on the number of services delivered. There may be an adjustment to the payment based on a quality score. Results data are submitted to a third-party verifier, and there may be additional counter-verification carried out by an external institution.
Evolution of RBF and strategic health purchasing
The RBF program currently being implemented in Zimbabwe fits this model and is appropriate for the phase of development of Zimbabwe’s health-purchasing function and the problems the country is trying to solve. The question is where to go from there? If the RBF pilot is successful in moving from a scheme to being an integrated part of the system, this means that the contracts for purchasing and verification eventually will be carried out by an institution from within the system. Payment systems will evolve to create the right incentives to achieve changing objectives. Data and information will inform these changes and strengthen the dialogue between the purchaser and providers. RBF will also evolve from paying mainly for output to paying for other dimensions of performance as a complement to the underlying provider payment systems.
From what we observed in the P4P programs in our review, if the programs continue to drive a greater focus on health system objectives, better generation and use of information, and more accountability, they can eventually lead to the purchase of more integrated and better defined output, such as chronic-disease management delivered according to clinical guidelines. Some OECD countries are using P4P to move even further toward payment for fully integrated output and outcomes. This is a long journey, and the destination is far off for many low- and middle-income countries. But we should at least start thinking about what the roadmap may look like, so that schemes can be designed from the very start to drive in the right direction. We need to keep in mind that RBF, itself, is not the destination, and that it also should not be taken as a side road either.