Pay for performance

Pay for Performance is a cross-cutting research project, covering all three RESYST research themes: financing, health workforce and governance

Why it matters 

Pay for performance (P4P) is a purchasing mechanism that provides funds to health care providers based on the achievement of pre-specified performance targets, with a view to improving the quality of health services and enhancing service coverage.  

Despite the roll out of such schemes in several low and middle-income countries, the evidence base remains limited. In particular, we lack an understanding of the pathways through which P4P results (or not) in outcome changes, for instance through improved resourcing, more functional accountability mechanisms or improved motivation of health workers. 

What we did 

This cross-theme research study aimed to better understand how P4P affects health facilities with different characteristics and achieves outcomes in Pwani region of Tanzania, where a pilot P4P scheme has been implemented since 2011.  

It examined the effect of P4P on the functioning of accountability mechanisms within the health system, and on facility resourcing (drugs, supplies and equipment availability) and resource allocation. This enabled researchers to test possible mediation pathways through which P4P results in changes in outcomes.  

The research was conducted prior to a phased national roll out of P4P in Tanzania. It is hoped that the key findings of the study will shape the roll out process to maximise positive impacts of P4P on population health.  

What we found 

  • P4P can increase access to drugs and medical supplies, especially in poor, rural areas.
    The increased availability of drugs and medical supplies will improve the quality of care and make services more acceptable, effective and affordable for patients.

  • P4P had some positive effects on internal accountability with increased timeliness of supervision and the provision of feedback during supervision. 
    P4P resulted in improvements in internal accountability measures through improved relations and communication between stakeholders that were incentivised at different levels of the system. 
  • P4P had more limited effects on external accountability.
    Although attitudes towards patients appeared to improve, community engagement through health facility governing committees remained limited. 
  • Positive impacts of P4P on the behaviour of health workers. 
    P4P provided an incentive for health workers to be more respectful towards their clients, and improvements in provider kindness and quality of care led to increased use of health services. P4P also strengthened relationships between health workers and managers involved in the intervention; however, it created tensions between other health workers who didn’t benefit from P4P. 
  • The effect of P4P on institutional deliveries is mediated by financing and human resources factors, while uptake of antimalarials in pregnancy is mediated by governance factors.

Implications for policy and practice

  1. While P4P can help reduce short-term stock outs, the national procurement and supply system should also be revisited, together with adequate budget allocations for effective procurement and supply of commodities.

  2. Efforts are needed to increase other sources of funds for providers to procure supplies and drugs, such as the community health insurance scheme, as this provides an alternative to government allocations which may be insufficient.

  3. Incentivising health care managers as well as providers is important to maximise the effects of incentives on the availability of drugs and supplies.

  4. Implementers should examine the lines of accountability within the local context when setting incentives and deciding who to incentivise in P4P schemes.