Systematic review and meta-analysis of demand- and supply-side financial incentives

consideration of PBF’s impacts on health systems and how these impacts may be better understood. This discussion touches on why typical intervention evaluations may not successfully capture the entirety of a PBF program’s impacts—particularly those at the system level—and how policy makers and researchers can begin to understand these impacts in the absence of standard evaluative evidence.

The push toward performance-linked financing, such as through PBF, in the health sector is occurring in an environment where demand-side financial incentive mechanisms aimed at households, such as maternity care vouchers and conditional cash transfer (CCT) schemes, are also being introduced and scaled up. For example, faced with low screening rates for noncommunicable diseases despite the introduction of incentives on the supply side and mass communication campaigns, the Armenian government piloted and tested demand-side incentives and interventions to increase screening rates for hypertension and diabetes (box 6.2).

The different financing approaches have the common aim to lower the relative price of accessing or providing care relative to income. Supply- and demand-side financial incentives are to some degree complementary but not perfectly. They can be complements if they relieve different financial or behavioral constraints, but they may also serve as substitutes. For example, incentivizing patients might also reduce effort by providers to perform outreach activities, or it might reduce quality by increasing volumes at the facilities.

Thus, policy makers can legitimately ask whether it is wiser to use supply- or demand-side financial incentives. As illustrated in figure 6.1 and acknowledging that in practice some of the distinctions across programs can be less clear-cut, financial incentives can be described as varying by whether they operate on the supply or demand side and whether they reduce the patient’s user fees, increase the household’s income, or affect the provider’s income (Neelsen et al. 2021). For example, performance pay approaches, including PBF programs, reward providers of primary or secondary care reproductive, maternal, and child health (RMCH) services. Vouchers give beneficiaries free or subsidized access to RMCH services for which providers are reimbursed on a fee-for-service basis, while CCTs