A nurse at Kibungo Hospital prepares dose for a patient (Photo: Ministry of Health)
In a bustling district hospital outside Kigali, Dr. Jean-Pierre tirelessly attends to a continuous stream of patients, diagnosing illnesses, assisting in childbirth, and responding to emergencies.
Despite his unwavering dedication, his compensation remains unchanged, irrespective of his workload or the quality of care he provides. Unlike some of his counterparts in hospitals benefiting from Performance-Based Financing (PBF), Dr. Jean-Pierre receives no additional incentives for his efforts.
“We see hundreds of patients every week, but our salaries stay the same,” he said. “Meanwhile, in some hospitals, doctors and nurses receive bonuses for meeting performance targets. It feels unfair.”
Dr. Jean-Pierre’s sentiments echo a broader concern within Rwanda’s healthcare system. A new study “Performance-based financing in Rwanda: a qualitative analysis of healthcare provider perspectives” published in BMC Health Services Research journal by team led by health systems expert Dr Costase Ndayishimiye, underscores the disparities arising from the selective implementation of PBF.
The researchers ighlight the pressing need to extend this system to all healthcare facilities to promote equity and enhance healthcare outcomes.
Understanding Performance-Based Financing (PBF)
Performance-Based Financing is a health financing strategy that links financial incentives directly to measurable healthcare outcomes. In simple terms, healthcare providers and facilities receive monetary rewards upon achieving specific performance indicators, such as increased immunization rates or improved maternal health services.
This approach aims to enhance the quality and accessibility of healthcare by motivating providers to meet predefined targets.
Rwanda pioneered PBF in 2001, initially launching it as a pilot project to improve healthcare delivery by financially motivating health workers and institutions.
Encouraged by the initial successes, the government scaled up PBF to a national framework in 2006, encompassing various levels of service delivery, from health centers to the Ministry of Health central level.
Sustainability and Financing of PBF
The sustainability of PBF in Rwanda relies on a combination of government funding and support from international donors. The government has demonstrated strong leadership in adopting and expanding PBF, integrating it into the national health strategy to ensure long-term viability.
Additionally, donor-funded pilot projects provided the evidence base for the government to implement PBF nationwide, indicating a collaborative effort between domestic and international stakeholders.
Performance Evaluation and Grading
In Rwanda’s PBF system, performance evaluation involves several key functions: performance contracting, assessment, and payment. The Ministry of Health oversees the strategic direction and establishes policies and procedures guiding PBF implementation.
Within this framework, health facilities enter into performance contracts that define targets they must meet to receive incentive payments. The assessment of these targets is conducted through a structured process, ensuring that both quantitative and qualitative performance indicators are accurately measured before disbursing funds.
How PBF Creates Inequality in Healthcare
The study by Dr Ndayishimiye et al. reveals that hospitals with high accreditation scores receive higher PBF payments, enabling them to provide better equipment, more staff, and improved services. Healthcare workers in these hospitals benefit from consistent PBF bonuses, which keep them motivated and encourage them to deliver high-quality care.
A doctor from one such hospital noted, “Hospitals that regularly receive PBF payments have staff working with greater commitment. These hospitals generate more revenue and provide better services.”
Conversely, hospitals with lower accreditation scores receive less funding despite serving larger populations. These hospitals often grapple with understaffing, limited hospital beds, and inadequate equipment, making it challenging to meet performance targets. Consequently, doctors and nurses work harder but receive smaller bonuses or none at all.
One doctor recounted his experience: “I left my first hospital because we had a high patient load, but since our accreditation score was low, our PBF payments were much lower than in my current hospital.”
Urban vs. Rural Hospitals: An Unfair Distribution of Resources
The study also highlights disparities between urban and rural hospitals. Urban hospitals, particularly those in Kigali, often have more patients but receive less PBF funding than smaller hospitals with high accreditation.
This means that even though urban hospitals are overcrowded, they struggle to secure the financial incentives needed to support their staff. In contrast, rural hospitals benefit from decentralized management, where district health offices oversee PBF evaluations.
However, despite this advantage, some rural hospitals still face severe staffing shortages and resource limitations, even if they qualify for PBF funding.
A healthcare provider from one of these hospitals expressed frustration over this imbalance: “Some hospitals with high accreditation scores get more PBF funding, even though they serve fewer patients. Meanwhile, urban hospitals with many patients get less funding. It doesn’t make sense.”
Hospitals Without PBF: Struggling to Retain Staff
While hospitals with PBF enjoy the benefits of financial incentives, some hospitals in Rwanda do not receive PBF funding at all. This puts them at a significant disadvantage in attracting and retaining skilled doctors and nurses. Without performance-based pay, many healthcare workers prefer to work in hospitals where their efforts are financially rewarded.
A doctor from a non-PBF hospital explained the consequences of this disparity: “Hospitals without PBF funding struggle to attract and retain skilled providers, which increases inequities in the healthcare system.”
The Problem of Delayed PBF Payments
Even in hospitals where PBF is implemented, delays in payments remain a significant challenge. The study found that late disbursements lower morale and reduce service quality. Healthcare workers depend on these incentives, but when payments are delayed for months, their motivation declines.
A doctor in a PBF hospital shared their frustration: “If we know we’ll get paid on time, we are more motivated to do our best. But when payments are delayed for months, people lose interest in putting in extra effort.”
PBF funds are generally used in two ways: to pay staff bonuses and to cover operational costs, such as hospital maintenance and medical equipment. However, when hospitals face cash flow issues or slow reimbursements from health insurance providers, staff payments are often delayed.
A chief nurse explained how this affects morale: “In our hospital, PBF has helped increase prenatal visits, but when payments are delayed, morale drops.”
Why Rwanda Needs to Expand PBF to All Hospitals
The study by Dr Ndayishimiye and colleagues makes a compelling case for expanding PBF to all hospitals. This move would:
- Improve staff motivation by ensuring all healthcare workers receive fair financial incentives.
- Enhance patient care by encouraging doctors and nurses to provide high-quality services.
- Ensure fair distribution of resources so that hospitals with high patient loads receive adequate funding.
- Strengthen accountability by linking financial incentives to measurable performance improvements.
How to Make PBF More Effective
To successfully expand PBF to all hospitals, the government must address key challenges such as delayed payments and unequal funding distribution. The study recommends several solutions, including:
- Ensuring timely PBF disbursements so that hospitals and healthcare workers receive payments on time.
- Implementing digital tracking systems to monitor hospital performance and fund distribution more efficiently.
- Involving doctors and nurses in decision-making to ensure that performance-based incentives are fair and practical.
EDITOR’s NOTE – Editorial opted not use Dr Jean Pierre other names.
