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Definition of performance-based financing (PBF) and its basic principles

According to the MoH in « Guide for the Contractual Approach » (For Health Centres. User’s Manual. January 2008), Performance-based financing (or Contractual Approach) is a strategy for the financing of health services, which aims at increasing the quantity and quality of preventive and curative health care services provided to the population within the respect of standards, through “ care purchasing”.
Care purchasing is based on an agreement between a party purchasing (purchaser) and a party selling (seller) care services.
Funds from this purchase are used:
1.To motivate health staff by paying their performance-related bonus;
2.To train staff;
3.To ensure the functioning of health structures;
4.To finance any strategy aiming for the improvement of the quantity and quality of care.

Another definition (based on building blocks)

PBF may be considered as an approach consisting of several interventions or several building blocks aiming at improving the performance of health systems. Experiences demonstrated that changes in the system have more impact if building blocks are incorporated into PBF Projects.

PBF principles

1. Separation of regulatory functions, financing and service provision

2. Management autonomy, particularly for service providers, to be able to implement the strategies of the service-selling plan.

3.There is a need of a FA with an independent working capacity subcontracted by third-party donors for the channelling of funds meant for service purchasing.

Health facilities should be able to provide quality services. This implies motivated and sufficient staff.
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