Background: Performance-based financing (PBF) reforms aim to directly influence health worker behavior through changes to institutional arrangements, accountability structures, and financial incentives based on performance. While there is still some debate about whether PBF influences extrinsic or intrinsic motivators, recent research finds that PBF affects both.

The principal objective of this article is to evaluate whether Performance-based Financing (PBF) is a more effective alternative to input-based financing alone, with focus on HIV and maternal and child health (MCH) services. The secondary objective is to determine the temporal effects of PBF in order to better understand its lifecycle—how long it takes for PBF to take effect and how long this effect lasts. Third, this study examines the relationship between the level of effort for a particular indicator and its responsiveness to PBF.

This report reviews progress with a results-based financing (RBF) program in Mozambique aimed at strengthening the supply chain, specifically the performance of the Central Medical Store. Introduced in 2013 by USAID, the performance-based government-to-government grant conditions payment of quarterly tranches of funds to the Central Medical Store, (Central de Medicamentos e Artigos Medico [CMAM]), on results related to planning, distribution, and warehouse management. 

The author examines the ongoing debate on the role of the central medical store (CMS) role in developing countries’ public health supply chains.

The article highlights an experiment with the CMS (Central de Medicamentos e Artigos Médicos, or CMAM) carried out by the USAID Mission in Mozambique.

Dr. Robert Soeters, an independent public health and health financing specialist, shares a personal story about performance-based financing.

Soeters explores the PBF programs he has witnessed in countries such as Burundi, Cambodia, the Democratic Republic of Congo and Rwanda.

The predominant model of public health commodity supply chains in developing countries is one dominated by a central medical store (CMS). In this model, the CMS plays the pivotal role of procurement, storage and warehousing of all health commodities before they are distributed to the next level in the supply chain. Challenges with technical and organization capacity at the CMS level has led to longstanding difficulties in creating sustainable performance improvements in several countries.

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