The availability of essential medical commodities is key to effective service delivery and maintaining population health. Shortages of medical commodities are associated with:

• poor structural quality of care
• poor quality relating to the attributes of the setting in which care delivery occurs
• low levels of patient satisfaction
• preventable deaths

Medicine and supply shortages in public facilities are also responsible for a large share of the out-of-pocket payments faced by house-holds in low- and middle-income settings limiting the affordability of care. However, ensuring the availability of essential medical commodities remains a challenge for many low-income country health systems.

This paper presents findings from research which sought to evaluate the effects of payment for performance (P4P) on the availability and stock-out rate of reproductive, maternal, newborn and child health medical commodities in Tanzania and assess the distributional effects.

The study found that P4P can improve the availability of medicines and medical supplies, especially in poor, rural areas, when these commodities are incentivised at both facility and district levels, making services more acceptable, effective and affordable, enhancing progress towards universal health coverage.