performance-based financing: The case of Argentina and Plan Nacer and Programa Sumar

In addition, there is evidence from several LMICs that PBF can be an effective strategy in terms of its impacts on health service utilization. As shown by evidence from Burundi (Falisse et al. 2014), Nigeria (Khanna et al. 2021), Rwanda (Basinga et al. 2011), Zambia (Friedman et al. 2016), and Zimbabwe (Friedman, Das, and Mutasa 2017), PBF appears to be particularly successful at increasing the rate of institutional deliveries or deliveries attended by skilled birth attendants. Some studies, notably two in Argentina (Gertler, Giovagnoli, and Martinez 2014; Celhay et al. 2019), also find increases in ANC utilization, while a few others report impacts on immunization of the mother or child (Argentina, Cameroon, Nigeria, Rwanda, and Zambia). The impact evaluation of Plan Nacer in Argentina (box 5.1) demonstrates impacts on health outcomes such as low birth weight and neonatal mortality. Despite some heterogeneity in the results,

Box 5.1 In Focus: A middle-income country’s experience with performance-based financing: The case of Argentina and Plan Nacer and Programa Sumar

The 2001 economic crisis plunged more than half of Argentina’s population into poverty and resulted in high unemployment (Fiszbein, Giovagnoli, and Adúrez 2003). Many Argentines lost their health coverage and turned to the public health system for care. The increased demand strained the system’s capacity to deliver services, and basic health indicators deteriorated. Between 2000 and 2002, Argentina’s infant mortality rate increased from 16.6 to 16.8 per 1,000, and in the country’s poorer northeastern and northwestern provinces, infant mortality was as high as 25 per 1,000 (Cortez and Romero 2013). As a result, the government of Argentina developed Plan Nacer to reduce infant mortality by increasing access to health care to uninsured pregnant women and children under age six, and to improve the efficiency and quality of the public health system by introducing changes in the incentive framework.

Plan Nacer’s performance-based financing (PBF) mechanisms created two levels of incentives: one between the national and provincial governments, and the other between the provincial governments and health facilities. Provincial governments received capitation payments from the National Ministry of Health based on the number of beneficiaries enrolled in Plan Nacer, and on the achievement of specified health indicator targets. Health facilities received fee-for-service payments from the provincial government according to the number and quality of services they provided (Cortez 2009). The health facilities benefitted from substantial autonomy in deciding how to use the PBF incentives. Some paid bonuses to health workers, while others reinvested in the facility to make improvements in infrastructure and service delivery (Heard 2012).

The government launched phase I of Plan Nacer in nine of Argentina’s poorest provinces in 2005 and brought the program to the 14 remaining provinces and the Autonomous City of Buenos Aires in phase II in 2007.

(Continued)

Box 5.1 continued

Impact evaluation

The impact evaluation of Plan Nacer used a unique data set based on birth and medical records combined with administrative data to estimate the causal impact of Plan Nacer on specific birth outcomes during 2004–08 in six of the program’s nine initial provinces. The results show that the use and quality of prenatal services increased, resulting in reduced incidence of low birth weight (less than 2,500 grams) and lower in-hospital neonatal mortality (Gertler, Giovagnoli, and Martinez 2014). Specifically, the program beneficiaries were 19 percent less likely to be low birth weight compared with nonbeneficiaries. They also had a 74 percent lower chance of in-hospital neonatal mortality in larger facilities. Approximately half of the reduction in deaths is attributed to better prenatal care that prevented low birth weight, while the other half is the result of better postnatal care. The program also increased the use and quality of prenatal care services as measured by the number of prenatal care visits and the probability of pregnant women receiving a tetanus vaccine. The results further show that the financial autonomy provided to facilities by Plan Nacer allowed a better allocation of scarce resources, which in turn had a positive impact on the health outcomes of the beneficiaries. The cost-effectiveness analysis finds Plan Nacer to be highly cost-effective compared with Argentina’s gross domestic product per capita over this period. However, the study also finds small negative spillover effects on prenatal care utilization of nonbeneficiary populations in clinics covered by Plan Nacer, but no spillover was detected on birth outcomes.

Beyond Plan Nacer

Lessons from Plan Nacer’s results were particularly valuable as the government of Argentina started to implement Programa Sumar (Ministerio de Salud Argentina 2013). This new program used Plan Nacer’s PBF mechanisms. While extending health coverage to uninsured children and adolescents under age 19 and to uninsured women between ages 20 and 64, it also continued to provide coverage for uninsured pregnant women.

the evidence supports the conclusion that PBF pilots can lead to improvements in some aspects of maternal and child health, particularly institutional deliveries.

In two instances, however, impact evaluations failed to find evidence of significant changes in any of the targeted service utilization indicators: in Afghanistan and in a pilot in Haut-Katanga province in the Democratic Republic of Congo (Huillery and Seban 2021). In Afghanistan, two studies were conducted, but the periods covered overlapped with a significant increase in armed conflict across the country, which may have contributed to the lack of impact of the PBF pilot on service utilization. In the pilot in the Democratic Republic of Congo, the authors note that an implementation error led to health workers in treated facilities facing a 42 percent

reduction in their remuneration. Unsurprisingly, this was accompanied by a large decrease in health worker motivation and satisfaction (further discussed in the following section) and may be tied to the lack of impact of the pilot.

Most of the impact evaluations were conducted 18 to 24 months after the intervention started, and few studies have looked at the sustained impacts of the pilots. One exception is Ngo and Bauhoff (2021), who use data from the Rwanda Demographic and Health Surveys to look at the short- and medium-term impacts of the Rwanda PBF pilot studied in Basinga et al. (2011). They find that in the short run, the program increased institutional deliveries and the completion of four ANC visits, and in the medium run there were further improvements in institutional deliveries. However, they also find that decentralized but unconditional financing was an effective alternative to PBF. Chapter 6 returns to the topic of direct facility financing as an alternative to PBF.

However, the impact evaluations present mixed evidence of effectiveness—perhaps except for institutional delivery—thereby highlighting the uneven impact of PBF programs in improving coverage, quality, and effective coverage (Diaconu et al. 2020). Such unevenness may not necessarily be surprising: broad-based health system reforms are typically complex and depend on both local context and the quality of implementation. PBF is no exception.

While effective coverage is the intermediate step, the end goal of health interventions is to improve population health outcomes. In maternal and child health, an example of such improvements to health outcomes would be reductions in maternal and neonatal mortality. Few studies examine such impacts. In secondary care settings, there is some evidence that PBF interventions can lead to reductions in mortality or closely related health outcomes. In Argentina, Celhay et al. (2019) find evidence of a large (74 percent) reduction in in-hospital mortality and a 19 percent reduction in the probability of low birth weight in larger health facilities but not in primary care settings. In the Kyrgyz Republic, Friedman and Kandpal (2021) find that a PBF intervention significantly reduced maternal blood loss and the incidence of severe postpartum hemorrhage, as well as improved a summary score of a newborn’s condition at birth. However, both studies examine impacts on large, secondary hospitals. This experience is broadly consistent with high-income countries’ experiences tying PBF to improved health outcomes in large hospitals (Mendelson et al. 2017).