Performance-Based Financing and Health Outcomes in Rwanda: A Rigorous Evaluation
Paul Gertler, Christel Vermeersch
Health Economics · 2012 · DOI: 10.1002/hec.2842
Countries: Rwanda
What Was Studied
A randomised evaluation of Rwanda's national performance-based financing (PBF) programme, which pays health facilities bonuses based on the quantity and quality of services delivered. The study covered 166 health facilities over 23 months.
What They Found
PBF increased institutional deliveries by 23% and preventive care visits for children by 56%. Quality improvements were significant: facilities improved cleanliness, equipment maintenance, and clinical protocols. However, the effect was driven primarily by the financial autonomy facilities gained (ability to spend earnings), not just the performance incentive itself. Facilities with stronger baseline management capacity benefited more.
What This Means for Nepal
Nepal's local governments could adopt PBF principles for health facilities under their jurisdiction. The key insight is that financial autonomy matters as much as the incentive — health facilities in Nepal often lack spending authority even when budgets are allocated. Nepal should pilot PBF with built-in capacity building for facility management and clear quality indicators aligned with national health priorities.
Contextualisation
Rwanda's performance-based financing model has been widely cited as a success story for LICs. Nepal has piloted results-based financing in some districts. Rwanda's experience offers lessons on designing payment systems that incentivise quality and coverage.