New Approach to Financing Health

11 December 2013

Countries and major donors are changing the way they finance maternal and child, malaria, tuberculosis and HIV/AIDS health programs in low-income countries to increase their impact.

The approach, called Results-Based Financing for Health, or RBF, pays providers or recipients of health services after pre-agreed results have been achieved and independently verified.

RBF is a change from paying for inputs to paying for services delivered. It works for both donors and developing countries. It assures donors that their funds are being used as intended and producing the desired results. This includes how countries disburse their own resources.

Early research shows that countries that use RBF can get 20 percent more health care for the same amount of money with a higher quality of care. "Evidence shows that results-based financing has a significant impact – saving lives and expanding access to quality, essential health services for the poorest women and children in developing countries,” says Jim Yong Kim, President of the World Bank Group.

UN Secretary General Ban Ki-moon, whose multi stakeholder partnership, Every Woman Every Child, is sparking important gains, says: “Innovative approaches to financing are urgently required to meet the health needs of the world’s women and children. Results-based financing can improve the quality and efficiency of services and, just as important, enhance equity.”

“RBF shows the way for changing aid from a focus on input to a focus on results and outcomes and thus provides a promising new modality complementary to systemic approaches,” says Chancellor Angela Merkel of Germany. Norway and Germany are implementing an innovative RBF approach in Malawi to improve maternal health.

In Rwanda, the government decided to implement a national RBF scheme, paying incentives for the delivery of quality maternal and child health services. The rigorous evaluation showed that the program improved both the coverage as well as the quality of health services. The results also showed that an equal amount of financial resources without the incentives didn’t achieve the same gain in outcomes.

“Rwanda proves that RBF can be successful under almost any conditions if we support the process,” says Ambassador Claver Gatete, Minister of Finance and Economic Planning in Rwanda.

“Simply, incentives work effectively," says Norwegian Minister of Foreign Affairs Børge Brende. "We have proved this method with the evaluations, and continue to carry these out in more than a dozen countries.”

“This approach to delivering aid aims to ensure every penny we spend on life-saving health program produces real results. It is good for donors, good for taxpayers and, most importantly, good for the millions of people across the developing world who desperately need access to better healthcare,” says Lynne Featherstone, UK International Development Minister.

Created in 2007, the Health Results Innovation Trust Fund (HRITF), managed by the World Bank, is supporting 36 RBF programs in 31 countries, committing $404 million of donor funding from the Governments of Norway and the United Kingdom, which is co-financing to $1.6 billion from the International Development Association, the World Bank Group’s fund for the poorest countries. About 75 percent of HRITF funding supports programs in sub-Saharan Africa, which bears over half the global burden of maternal mortality.

On December 11th, RBF experts from around the world are meeting in Oslo to review the experience with RBF programs so far and determine a roadmap for scaling up.

Besides the partners, Norway, UK, the World Bank Group, UNICEF, the Global Fund to Fight AIDS, Tuberculosis and Malaria, and GAVI Alliance, representatives from Germany, Japan, Sweden, the US and the Bill & Melinda Gates Foundation are attending the meeting.

The Global Fund to Fight AIDS, Tuberculosis and Malaria recently joined the partnership for RBF, expanding funding objectives beyond maternal and child health to include malaria, tuberculosis, and HIV/AIDS.

“We studied the RBF results very carefully,” says Mark Dybul, M.D., Executive Director of the Global Fund. “Clearly, if it worked for maternal and newborn health, it should work for AIDS, tuberculosis, and malaria.”

“When we invest in the areas of greatest need – the most disadvantaged communities – we achieve the greatest results,” says Anthony Lake, Executive Director of UNICEF. “Results-based financing can help us make better and smarter investments there. This is good for the most marginalized populations and it’s good for investors – all those who are putting their hard-earned resources into helping others.”

“Accountability and results are at the heart of GAVI’s work with countries. By joining in the RBF effort, we can help children in getting other lifesaving medicines and join forces to reach every last child,” says Seth Berkley, M.D., CEO of The GAVI Alliance.

Rajiv Shah, M.D., M.B.A., USAID Administrator, says, “Emblematic of a more results-oriented, evidence-based approach to development, initial RBF results from these low-income countries are promising. By delivering global health more efficiently and effectively than ever before, we can help end extreme poverty and its most devastating consequences of child hunger and child death."

RBF is an umbrella term that encompasses many different kinds of interventions. The formal definition of RBF is that it "covers cash or non-monetary transfers to a national or sub-national government, manager, provider, payer or consumer of health services after predefined results have been attained and verified. Payment is conditional on measureable actions being taken."

Afghanistan was the first recipient of an HRITF grant in 2007. Now, three quarters of the projects are located in Africa and another 13 percent in South Asia. The remaining projects are in Latin America and the Caribbean, East Asia and the Pacific, the Middle East and North Africa, and East and Central Asia. Three countries -- Sierra Leone, Burundi and Rwanda -- have nationwide RBF programs.

Rwanda, Burundi, Nigeria, Cameroon, Zimbabwe, and Zambia are all examples where RBF approaches have contributed to significant advances in coverage and quality of maternal and child health services. As an added benefit, these grants have helped to make health systems more accountable by shifting the focus to measureable results.