Population Council Research that makes a difference

In Bangladesh, the public-sector payment system does not provide any performance-based incentives to health service providers. Moreover, remuneration for these service providers is well below that from the private sector. Public-sector services are supposed to be provided free-of-cost, or at a very low cost. Often, however, public-sector service providers refer patients to their private clinics for personal gain, or, alternatively, they charge unofficial fees while delivering services at government facilities. Unfortunately, many poor people cannot afford to pay these fees, which makes it difficult for them to get the services they need. The absence of financial incentives discourages providers from being accountable and responsive to the patients they serve. These issues indicate that service providers can be motivated to perform better if they are given financial incentives.

Introduction of a "Pay-for-Performance" (P4P) mechanism in the public-sector health system has the potential to motivate providers to improve the quantity as well as the quality of maternal, newborn, and child health (MNCH) services. Paying an incentive to providers for achieving at least a benchmark performance level will increase the quantity and quality of MNCH care, provided the required facility infrastructure, including human resources, is in place. Along with providing supply-side incentives, P4P reduces demand-side barriers to receiving MNCH services. On the demand side, offering financial assistance to meet out-of-pocket expenses related to medicine, transportation, and other costs to poor women may reduce barriers to facility-based pregnancy, newborn, and child health care services.

The Population Council organized and led a series of workshops to identify possible mechanisms for introducing P4P initiatives into the government health system. In addition, government policy formulators and program managers, development partners, local government representatives, and other stakeholders were oriented and sensitized on the P4P approach. Through these workshops, a model for paying incentives to service providers in the public sector based on performance has been laid out. In addition, the Council assessed the feasibility of P4P at the service-delivery level and developed a proposal for implementing a P4P program.