1. Performance-Based Intergovernmental Transfers Brazil’s Family Health Program and Argentina’s PLAN NACER Program Jerry La Forgia With thanks to Rena Eichler and Christian Baeza

2. Summary Brief overview of results-based financing Brazil ‘s Family Health Program – incentives to increase coverage – Pilot incentive scheme to increase coverage, efficiency and effectiveness Argentina’s Plan Nacer – Results-based model – Financial flows – Indicators

3. Why consider Results Based Financing? Business as usual is not working Problems – Coverage/utilization/access – Uptake of preventive services – Quality – Volume – High OOP spending

4. Many labels Pay for Performance or “P4P” Results-Based Financing or RBF Performance-Based Financing Output-Based Financing Performance-Based Contracting Performance-Based Incentives Conditional Cash Transfers Conditional Cash Payments

5. Concept Payers (Government, Health Programs, Insurers, Communities ) Payers (Government, Health Programs, Insurers, Communities ) Recipients (Households, Service Providers (Facilities, Health Workers), Health Programs, Sub-National Levels of Government Money, Goods, Other Rewards Well-defined and measureable results

6. Levels to consider: from payer to recipient National GovernmentState GovernmentSub-State Level (District, Municipality) Service Provision Level (Public, Private) Demand Side (Household, Individual)

7. Types of Approaches (supply side) Pay for quality – Pay for structure (e.g., personnel, training) – Pay for process (e.g., use of protocols, patient tracking, – Pay for accreditation – Pay for mistake prevention (e.g., control of adverse events) – Pay for outcomes (e.g., reduction in readmissions) Pay for targeted service delivery (e.g., immunizations) Pay for production or utilization Pay for insurance coverage Pay for information collection and reporting

8. Types of Approaches (demand side) Pay for healthy behaviors (e.g., program participation and retention; reduce rates of highly additive behaviors; smoking cessation ) Paying for health care behaviors (e.g., preventive visits, follow-up visits, blood pressure control, immunizations, institutional deliveries, etc.)

9. Possible Pitfalls Excessive attention to reaching targets to detriment of other interventions or services Undermining intrinsic motivation, turning health care delivery into “piecework” “Gaming,” – managing the metric Cream skimming Institutional readiness – Rules of game (ex. Agreement/contract, stakeholder consultations) – Pay on time – Define measureable indicators – Monitor and verify indicators (catch “inflators”) – Enforcement (political interference) – Degree of provider autonomy (let managers manage)

10. Other Issues The problem of small numbers The luck of the draw (or not) How much of an incentive is needed to capture provider attention? – Dependent on provider transaction costs?

11. What about impact? Studies with robust methods and samples are far and few between Many experiments underway Results so far -- Mixed bag for provider-targeted incentives – Some improvements – Providers do respond to incentives – Attribution problem; unclear causal linkage – Ad hoc interpretations More robust results for patient-targeted incentives – Addictive behaviors and care behaviors

12. Lessons Learned In-flight adjustments are common as scheme matures P4P costs! – Finding resources to sustain program – Need for TA investments Plateau effect – How to incentivize continuous improvements? Burden/cost of data collection – Ensuring data validity Perverse effects – Lower volume/quality for activities not incentivized Incentives may be too weak to overcome other incentives embedded in payment mechanism

13. Getting from Here to There 1.Assess and prioritize performance problems 2.Consult stakeholders 3.Select recipients 4.Define indicators, targets and how to measure them 5.Set payment rules, sources of funds, and how funds will flow 6.Determine management and operational roles and systems – Establish contracts/agreements – Routine Monitoring – Validation – Payment – Assess and revise

14. Inter-governmental Transfers Brazil’s Family Health Program

15. Institutional Readiness Financial system reform How to make federal government financing for health more effective and less cumbersome? How to make subnational entities (states and municipalities) more accountable for use of federal financing?

16. Old System GoB Municipal Treasury State treasury State Health Secretariat Municipal Health Secretariat Services, Programs, Investments Services, Programs, Investments

17. MUNICIPAL HEALTH FUND FEDERAL HEALTH FUND Transfers Brazil Federal Financing Subsystem for Health Implemented by Municipalities State Health Fund Transfers MUNICIPAL HEALTH SECRETARIAT FEDERAL HEALTH MINISTRY Payment mechanisms Private providers Public providers Bene- ficiaries

18. The Case of the Family Health Program (PSF) 1994+ Primary care program Active outreach and prevention – Tracking of family and community health – Based on Family Health Approach Team: doctor, nurse, nurse auxiliaries and community health agents

19. 1.Women´s health pre-natal care, prevention of cervical cancer, family planning 2.Child health growth & development, nutrition, immunization, treatment of prevalent illnesses 3.Control of hypertension 4.Control of diabetes 5.Control of tuberculosis 6.Elimination of leprosy 7.Prevention of, testing and counseling re. HIV including prevention and treatment of STIs 8.Oral health 9.Health promotion activities 10.Population-based health activities PSF: Original Priority Areas

20. PSF Performance-based Financing Scheme Problem: slow uptake of program by municipalities Objective: Provide incentives to municipalities to establish program and expand to poorest Brazilians – Flat one-time transfer for establishing each new PSF team – Variable transfer to incentivize continuous coverage extension (co-financed recurrent costs of teams)

21. LevelPopulation CoverageAmount per team per year ($R) 10 to 4.9 %R$ 28.008,00 25 to 9.9 %R$ 30.684,00 310 to 19.9 %R$ 33.360,00 420 to 29.9 %R$ 38.520,00 530 to 39.9 %R$ 41.220,00 640 to 49.9 %R$ 44.100,00 750 to 59.9 %R$ 47.160,00 860 to 69.9 %R$ 50.472,00 970 % and moreR$ 54.000,00 Financial Incentives for Family Health Program (2002)

22. Annual Number of PSF Team, 1994-2008

23. Pilot Scheme (2009+) Improve coverage, effectiveness, quality and efficiency of PSF in large cities Financing varies according to compliance with indicators Can earn additional 15% bonus for participation and establishment of quality certification program for PSF

24. PERFORMANCE-BASED INCENTIVE SCHEME FOR PARTICIPATING MUNCIPALITIES (variation in per PSF team allocations according to performance category)

25. Indicators Effectiveness 1. Increase in per capita medical visits PSF teams 2. Infants <1 with complete vaccination regimen (DPT-H, polio, measles, tuberculosis) 3. Pregnant mothers with 7 or more pre-natal consultations 4. % patients referred from Family Health teams for specialized care over total number of PSF medical consultations Efficiency 5. % reduction of hospital admissions for stroke 6. % reduction of hospital admissions for children <5 for acute respiratory infections (ARI) Management 7. PSF teams supervision Supervision plan (objectives, schedule, checklist) No. of municipal supervisors PSF teams supervised (with verified supervisory report) 8. % PSF teams trained in at least 4 PSF strategic areas

26. Argentina’s Plan Nacer Financing Health Sector Results

27. Problem – Inequitable distribution of resources across states and w/I states – Many poor Argentines lost health insurance during economic crisis of 1997-2002 – Increase in IMR and MMR rates Objective – Increase access to basic health services for uninsured mothers (during pregnancy) and children (up to 6 years old), contributing to decrease infant and maternal mortality – Target the poorest states (600,000 beneficiaries ) PLAN NACER

28. New Results-based Transfer model Introduced financial incentives between the federal government and provinces (states) and between the states and public and private providers, linking financing with results (output and intermediary outcomes). Established MCH package of services Created capitation-based grant transfer based on cost of MCH package – 60% of the capitation payment released upon monthly certification of enrolment of eligible population, and – 40% of the capitation payment released for each of the 10 Tracers goals achieved (quarterly, ex-post audited by a concurrent auditor)

29. Funding flows State Health Authorities Federal Health Ministry Private providers Public providers Provision of service package Per capita – Based Transfers 60% on verified enrollment 40% on verified Tracer indicators Fee-for service Auditor Provision of documentation on enrollment and services Fund releases triggered by verification of outputs

30. TRACERS Timely inclusion of eligible pregnant women in prenatal care services Effectiveness of neonatal and delivery care (Apgar Score) Effectiveness of pre-natal care and prevention of premature birth (weight above 2.5 kilos) Quality of pre-natal and delivery care ( number of mothers immunized and tested for STDs) Medical Auditing of Maternal and Infant deaths Immunization Coverage (measles vaccine) Sexual and Reproductive Healthcare Well child care (1 year or younger) Well child care (1-6 years old) Inclusion of Indigenous Populations

31. Design Elements Certification by Independent Concurrent Auditor – Certification of beneficiary eligibility is done by the Concurrent Auditor through monthly cross-checking of beneficiary databases and enrolment registers. – Certification of Tracers is done by the Concurrent Auditor through both, certifying surveillance and monitoring systems at provincial and provider levels as well as through sample auditing of medical records at provider level – Penalties for erroneous billing (125% of capitation is discounted)

32. Design Elements Fee-for-service payment to public and private providers Providers can use up to ½ of payment to pay staff bonuses Free choice of provider State governments – Enroll beneficiaries – Establish purchasing/contract management unit – Contract providers – Strengthened surveillance and monitoring systems required to certify achievement of tracers

33. Results

34. Business as Unusual For the first time in Argentina and Brazil’s public health sector, national financial transfers to the states and municipalities are linked to verifiable results. Also for the first time, in Argentina financing of public providers is done on the basis of delivery of services to eligible population. In Brazil, financing based on no. of enrollees, and more recently, reaching performance benchmarks New output and outcome data is beginning to serve as basis for strategy and planning at federal, state and municipal level