By Petra Vergeer and Sarah McCune
To improve health outcomes and to boost the efficiency, equity and quality of their health systems, low- and middle-income countries across the globe are piloting various results-based financing (RBF) approaches, such as performance-based financing (PBF) to strengthen the supply of health services. These pilots are now beginning to show exciting results and governments and donors are interested in learning more about the different opportunities to support the scale-up of successful programs.
During a high level meeting held in Oslo on December 11 - 12, 2013, the country governments of Tanzania, Burundi, Zambia, and Argentina and key development agencies discussed the possible ways to harmonize support for scaling up successful programs in countries. A review of the current portfolio of RBF projects supported through the Health Results Innovation Trust Fund (HRITF) took place, showing different country experiences of how RBF programs can be supported:
- Purchasing results of specific RBF indicators in a country
- Purchasing RBF results in a specific geographic area in a country
- Financing technical assistance and support for RBF design and implementation in a country
- Supporting RBF globally through the World Bank’s HRITF.
Purchasing Specific RBF Indicators in a Country
Different development partners may have different strategic interests and priorities, and purchasing specific RBF services is one option for those interested in supporting the implementation or scale-up of RBF. The national PBF program in Rwanda is an example of how development partners have supported RBF by purchasing specific indicators or services.
The Government of Rwanda (GOR), the largest funder, drove the donor harmonization and alignment efforts. When PBF was scaled up nationwide, the GOR purchased 16 general health services, and PEPFAR purchased 15 related to HIV/AIDS. Interested in supporting PBF in Rwanda, the Global Fund (GFATM) agreed to purchase the reproductive health, HIV/AIDS, and tuberculosis indicators. Eight other development partners have since purchased indicators, and six of these have purchased indicators through PEPFAR. The harmonization and alignment efforts have benefited the government and the development partners: transaction costs for the government have significantly decreased, while efficiency in the reporting and verification mechanisms has increased for the partners. Among other advantages, this arrangement has also allowed for a broader package of services to be supported, which can reduce the possible consequences of focusing on one area at the expense of another.
Purchasing RBF for Health Results in a Specific Geographic Area of a Country
The presence of multiple donors in a developing country often necessitates that development partners concentrate their work in specific geographic areas. Purchasing health results in a particular geographic area is an option for development partners interested in supporting RBF. The experiences in Benin, Burundi, and Senegal provide three different examples of how partners can support RBF based on geographic distinction.
When PBF was scaled-up in Burundi, a virtual pooling system was implemented at the central level. This system both facilitated donor harmonization and streamlined the scale-up process. The Government of Burundi, the World Bank, and ten other development partners participate in Benin’s virtual pooling system. In this system, each health facility produces a monthly invoice, and after a verification process the invoice is distributed to the different development partners. The partners then pay a specified amount to each health facility. An advantage of this system is that it has enabled each development partner to maintain its own budget and financial procedures when paying a health facility; a long process of fiduciary harmonization with high transaction costs is avoided. Most importantly, it has attracted additional development partners interested in supporting RBF in Burundi.
A joint-basket fund is used in Benin to manage the PBF program which is identical across districts in regards to, for example, the indicators and verification mechanism. In this system, which the Ministry of Health (MOH) manages, the development partners—the Bank, GAVI, and the GFATM—contribute an equal share for the RBF operating costs, such as technical assistance and verification, based on the number of districts in which it works. Importantly, the co-financing arrangement has made it possible to scale-up PBF throughout Benin, and it is now in 85 percent of the country’s districts. For the development partners, one of the advantages of this co-financing arrangement was that partnering with the Bank reduced the fiduciary risk associated with the implementation of PBF, which made supporting the expansion of PBF more attractive.
The co-financing arrangement in Senegal represents one of the first instances of donor harmonization in the country’s health sector. The Bank has created a trust fund (TF) for USAID’s funding, and all funding flows through the Bank, complying with the institution’s fiduciary, financial management, and procurement rules and procedures. The Ministry of Finance receives the funds from the TF and then distributes them to MOH. The MOH then allocates money to the PBF health facilities based on their achievement of incentivized indicators. The co-financing arrangement benefits the Bank, USAID, and the government for a variety of reasons. First, transaction costs have been reduced for all partners, especially the costs related to fiduciary rules and financial management. Second, co-financing has also developed economies of scale around what are typically high-cost inputs, like verification. Third, increased funding can be allotted to PBF payments because a third party, the USAID supported agency Abt Associates, is continuing to provide technical assistance for all partners.
Financing Technical Assistance and Support for a Country’s RBF Design and Implementation
Development partners can also support RBF by financing technical assistance (TA) and support for RBF design and implementation. The World Bank’s experience with partners in Haiti and Tajikistan demonstrate how these arrangements can be productive.
In Haiti, the World Bank, through IDA and HRITF funding, is supporting the Ministry of Public Health and Population (MSPP)’s implementation of PBF and is planning to scale it up within the next five years. USAID is also implementing a health service-delivery project in accordance with the country’s harmonized PBF approach. Both development partners provide technical assistance to the government on RBF but ensure that their TA work is complementary. The Bank, for example, supports the government in its decision making on how to set fees for the RBF indicators, while USAID has provided support for the development of the national RBF manual. The primary advantage of this arrangement is that there is not a duplication of efforts or processes, which increases efficiency. This arrangement also furthers the harmonization of PBF. Lastly, it fosters improved communication between the development partners because the provision of complementary TA requires significant coordination.
Through IDA and HRITF, the World Bank is funding the development and piloting of PBF in Tajikistan. Other development partners are supporting the pilot by financing activities related to the design and implementation of the pilot. UNICEF, for example, is paying for and is carrying out the independent verification of the PBF program. The organization is also financing the technical assistance to prepare the independent verification of the PBF methodology, and it will contribute the time of the technical staff involved in the verification. A particular advantage of this arrangement is that it allows the primary funder—the World Bank—to allot more of its resources to PBF payments for health results. Verification and TA are expensive inputs, and having a development partner co-finance them can allow for the other parts of the intervention to be better targeted or expanded.
Supporting RBF Design, Implementation and Learning Globally through the Health Results Innovation Trust Fund
Providing support to the HRITF is another option for development partners to co-finance RBF. The HRITF leverages World Bank IDA funding for RBF by awarding grants of up to $20 million, matching the country’s IDA allocation to RBF. The $20 million is used for RBF design and implementation—such as technical assistance and verification— in the 36 programs it currently supports. Because the HRITF grants are linked to IDA, they are part of broader support and policy discussions between the Bank and a country’s government, particularly their Ministries of Finance and Health. The trust fund also plays a vital role in learning about RBF. For example, the HRITF provides knowledge and learning grants for countries that are considering the appropriateness of RBF for their context. These grants support technical dialogue and learning on RBF through study tours to RBF projects in other countries, feasibility studies, and RBF technical workshops for policy makers and stakeholders. For countries that have decided to pilot RBF, the HRITF supports RBF learning through a variety of knowledge- and lesson-sharing events, such as the annual RBF Results and IE workshop.
There are multiple opportunities for governments and development partners to support RBF at the country and global level. Each of these options can help to scale-up and sustain RBF programs—programs that have the potential to improve health outcomes and promote positive changes within an existing health system.