Result Based Financing Part 1: From revolutionary to routine

Once considered “revolutionary innovation,” Results Based Financing in health is rapidly moving into “routine operations.”

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With hundreds of millions of dollars invested in establishing its “proof of principal,” questions remain about whether and when Results Based Financing is really better than more conventional input-based health financing. This is the first of a three-part blog series that will explore what to make of the so called “Results Based Financing Revolution.”

Results Based Financing is an intuitively attractive approach to health sector financing whereby monetary incentives are aligned to reward desired health results. Interest in Results Based Financing has centred principally on how it can improve the health sector efficiency and effectiveness. Along with similarly conceived concepts of Payment by Results and Performance Based Financing, Results Based Financing is based on a set of key principles including:

  • a segregation of responsibility among providers, verifiers and purchasers of services;
  • decentralisation of authority so facilities/providers decide how best to provide targeted services;
  • and payment according to pre-agreed outcomes.

A range of donors including the Belgian, British and Norway governments are funding efforts to understand whether and how Results Based Financing can work in practice. Over the last decade, the World Bank has hosted the Health Result Innovation Trust Fund : by mid-2015 the Health Result Innovation Trust Fund had deployed more than $400 million for evidence generation activities and leveraged more than $2.2 billion in IDA credits. Building in part on Results Based Financing principles, the Bank launched the Global Financing Facility  in late 2015.

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Among low- and middle-income countries Results Based Financing is “popular” as well. An increasing number of governments—from Burundi to Zimbabwe–are piloting Results Based Financing-based approaches, albeit usually with World Bank or other donor support. Some are beginning to take this work to scale. Still the implications of Results Based Financing in terms of operational systems and accountabilities are often less than straightforward.

Despite the investment over the last ten years, key gaps in the evidence persist. Is Results Based Financing is really more cost effective than more conventional approaches? How to adapt Results Based Financing to the circumstances of fragile states, where unmet need in Reproductive Maternal Newborn and Child Health  is often greatest? And how to ensure that the “benefit” seen in pilot and demonstration efforts is sustained when programmes are taken to scale?

In our work with Results Based Financing in countries such as Nigeria, Uganda and Zimbabwe, we have seen the scope for well-tailored, well-contextualised programme efforts to have a positive main effect in terms improved quantity and quality of many health services. Still there are big challenges if Results Based Financing is going to realise its potential at scale. In the next blog of this three part series, we will touch on the question of systems.

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Jeffrey W. Mecaskey

Jeffrey W. Mecaskey

Jeffrey Mecaskey is Technical Lead for Economics and Financing and Co-Lead for Evidence and Learning at HPI with 35 years’ experience in international development with a focus on health and political economics, health policy and management. He was chair of the programme management board for the UK aid funded Improving Access to Health Care for the Poor, Northern Uganda (NU Health), and is currently a Senior Technical Expert on the EU-funded EU-Strengthening Immunisation Governance in Nigeria (EU-SIGN) and Maximising the Quality of Scaling Up Nutrition+ (MQSUN+) programme.

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