Rwanda’s Pay-for-Performance Scheme for health Services
This article was based on a global health policy case study from the book “Millions saved.”
The purpose of this article is to study the impact of incentive payments on health workers in order to motivate them to provide better quantity and quality of health services in low- and middle-income countries. We will see the case of Rwanda, where the program took place to improve maternal, infant and child survival, and evaluate the effectiveness of the policy. Rwanda’s results are promising. Indeed, we observe improvements in child and maternal health and in workers’ efficiency. Secondly, the idea will be to see if pay-for-performance can be improved and generalized in low- and middle-income countries. That is why we will see how to implement this approach on maternal and child health in other countries.
Background and problem description
Developing countries’ situation
Health systems in low- and middle-income countries continue to face considerable challenges in providing quality, affordable and universally accessible care. In addition, we observe a critical lack of doctors. In 2006, 57 countries whose 36 in Africa had a critical shortage of doctors, nurses, pharmacist, … Most of the time, health workers leave the country to work elsewhere or abandon the profession due to conditions of work. They are poorly paid and work in very difficult situations, understaffed and poorly managed facilities. And among those who did not give up, we observe a high rate of absenteeism. One of the repercussions of a poor work environment is the performance of health workers. Then, because providers can only give standard care that is well below the state of their clinical knowledge, a lack of trust between patients and doctors takes place. Therefore, significant health problems begin when they clearly could have been avoided. One solution to remedy the problem could be skilled care provided by motivated health workers.
Pay-for-performance system (P4P), a solution?
The question is how to motivate health workers and therefore improve the quality of care? Since the beginning of the millennium, the pay-for-performance approach took place, in order to align providers incentives with patients and population welfare. It implies “a performance contract” with a set of specific “performance indicators” between the organization which offers payments and the health institutions which receive it. P4P will affect health care provision in two ways. First, through incentives for providers to put more effort into specific activities. And secondly, through an increase in the number of financial resources. However, some questions arise about the implementation of this process and the effects on the short and long term.
Analysis of Rwanda’s Pay-for-Performance Scheme for health services
Rwanda is a particular situation. The Rwandan genocide was a mass slaughter, carried out between April 7th and July 15th, 1994 during the Rwandan Civil War. About 10% of Rwanda’s population had been killed. The health sector facilities were destroyed, putting women, particularly, in difficult situations. Healthcare workers died or fled, and health care was scarce. There was a shortage of human resources and health facilities. Finally, the genocide ended with the military victory of President Paul Kagame. Once his government was secured and stabilized, with the help of national leaders and international humanitarian organizations, he wanted to rebuild the country’s economy, including the fragile health system.
To rebuild and strengthen the health sector, Rwanda began P4P payments at the health facility level, in an effort to improve maternal and child health. This approach, based on offering payment depending on the quantity and quality of health services provided, aimed to motivate health workers. P4P payments go directly to facilities and are used at each facility’s discretion.
Performance incentive is a mechanism that can increase health providers productivity in terms of supplying higher quality care to more patients. By increasing the productivity and efforts of health workers, people can use the health care system, which will increase the use of preventive care for children and pregnant mothers, the target population of this policy.
Firstly, in 2002, the program took place in Cyangugu, in Kigali and in Butare. Even if the first results were encouraging, a rigorous impact evaluation of this approach is needed. The well-known economist Paul Gertler was called to help in the design of a staged P4P. 17 Rwandan districts were split in two groups. In the first group (the treatment group), the P4P was introduced between mid-2006 and 2008. The second group is a control group, and instead of implementing P4P, they received lump sum budget supplements from 2006 to 2008, equivalent to the amount of P4P payment in the treatment districts. In 2006, P4P was introduced in 80 health facilities to assess the effectiveness of financial incentives on maternal and child health care.
The incentive payments were calculated according to a formula based on the quantity and coverage of health services, and then adjusted to the quality-of-service delivery, in order to motivate health workers. Health facilities’ performance were evaluated on 14 maternal and child health indicators. For each indicator that was met, facilities had the opportunity to increase their budgets by 25%. The quality of care was assessed every quarter, in every facility, during the surprise visit of a supervisor from district hospitals. He assessed quality indicators through direct observation and review of patient medical records. After his evaluation, he gave feedback and provided practical recommendations on how to improve the quality of services.
In addition to health care, there was an administrative part: each facility had to submit monthly reports of the situation to a district committee that evaluated them. To assess whether the reported situation was correct, an auditor made a quarterly surprise visit to each facility, assessing the situation and whether there had been any misrepresentation. In case of false declaration, the health establishment was publicly identified and sanctioned.
Results of policy implementation
The implementation of the program was imperfect. The administrative task was heavy, and health workers reported that the program distorted their prioritization, in the sense that the time used for filling forms was wasted at the expense of providing critical care to patients. Two others side effects emerge with P4P approach: “gaming” and “crowding-out” effect, which were threats to the quality of health services. The threat of the crowding-out effect appears when the introduction of external rewards for an actor driven by intrinsic motivation might lower or even erase intrinsic motivation. On the other side, gaming describes the phenomenon in which health workers tend to focus on evaluation indicators and neglect not remunerated care. In the gaming case, there are no systematic changes, rather an improvement of the indicators.
Despite these threats, P4P approach has positive impacts on utilization and quality of care. In comparison with the control districts group, P4P districts observed an improvement in the use and quality of prenatal and postnatal medical services, and these effects had a large and significant positive impact on child health outcomes.
It follows that these results were associated with an improvement in provider productivity. More specifically, the incentive effects generated a 20% improvement in health workers’ efficiency by reducing the gap between knowledge and actual practice.
Thanks to the impact evaluation carried out in Rwanda, the P4P approach can be an effective way to motivate health workers and improve the quality of health care. However, the design of the P4P approach is important and must be done smartly, in order to avoid wrong incentives.
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