Motivating Better Health: Why Other Types of Programs So Often Fail—and Results-based Financing Succeeds

    There are no magic bullets in life. For fixing a healthcare system, though, there is one approach that comes close: results-based financing. Management Sciences for Health (MSH) pioneered results-based financing in Haiti in 1999, and has been adapting and improving it ever since in sub-Saharan Africa, Latin America, and South-East Asia, including in fragile states.

    In my 20-plus years in global health, I’ve seen what happens without results-based financing: A major donor sends millions of dollars’ worth of equipment and supplies to a developing country—and the quality of health services delivered doesn’t improve—or worse, it declines. Why?

    Health providers are human, like all of us—sensitive to incentives, motivation, and demotivation. Say a hospital improves and now is well stocked: the community realizes this and the utilization rate doubles. Suddenly, a nurse may be facing 40 patients a day instead of 20, but without any added pay or assistance. It’s only natural he or she might work less under the crushing workload.

    WHY RESULTS-BASED FINANCING SUCCEEDS

    Results-based financing succeeds, in part, because it directly benefits the patients, the facility, and the providers. If the facility and providers reach the health targets, they get a bonus: part for the facility and part for individual staff. It might only be a small amount per worker (e.g., $50/month for a nurse), but that may represent a considerable windfall—perhaps 30 percent of the nurse’s base salary. If the facility performs moderately well, they receive a partial bonus, and the salary stays intact. No one gets docked.

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