Payment for performance (P4P) service volume equity effects impacting health service provision, staff motivation and retention

Professor Garrett Brown 

School of Politics and International Studies, Faculty of Social Sciences 

Relevant ESRC Discipline:  International Relations and Economics

Responsive Mode

Payment for performance (P4P) schemes reward providers based on service volume (payment per service rendered). We found that distribution of P4P bonus payments favour facilities with better baseline access to guidelines, more staff, larger catchment populations that were wealthier and closer to district headquarters, and that this effect persisted over time (contributing to a Matthew Effect of Accumulated Advantage). Unequal distribution of P4P pay-outs had negative consequences on staff retention, absenteeism and motivation. We found that scheme design contributed to the inequalities in bonus payments across health facilities, namely, rewarded facilities based on the volume of services provided.  Although additional bonuses were provided to more remote facilities, the remoteness bonus was calculated as a proportion of the quantity bonus, meaning that if quantity bonus was small the remoteness bonus would be too. This weakened service provision and undermined quality of care.

This finding provides an important evidence-base, since there are only two studies of this effect in LMICs, yet without analysis of knock-on effects or recommendations for mitigation. This IAA project will engage nine health ministries in Africa  (seven have P4P schemes) and the WHO to inform P4P best practice and how to improve service delivery and ultimately patient outcomes.