Performance Incentive Performance Incentive Contracts Experience Contracts Experience

in Cambodia in Cambodia by the BTC supported projectsby the BTC supported projects

Dr. Dirk Horemans 17th of December 2008

What’s on the menu?What’s on the menu?

BackgroundBackgroundBasic assumptions and set-upBasic assumptions and set-upResultsResultsLessons learntLessons learntThe futureThe futureFinal remarksFinal remarks

Cambodia Health SituationCambodia Health SituationAftermath of War and Khmer Rouge Genocide Aftermath of War and Khmer Rouge Genocide Population: 14 MillionPopulation: 14 MillionTraditional picture of developing countries health situation: Traditional picture of developing countries health situation: Communicable Diseases, high child and maternal morbidity and Communicable Diseases, high child and maternal morbidity and mortality but already in epidemiological transition with increasing mortality but already in epidemiological transition with increasing numbers of diabetes, hypertension and Road Traffic Accidentsnumbers of diabetes, hypertension and Road Traffic AccidentsRecent Substantial Improvements for several key health indicators Recent Substantial Improvements for several key health indicators (Cambodian Demographic health Survey 2005 versus 2000); But (Cambodian Demographic health Survey 2005 versus 2000); But Maternal Mortality Ratio remains very high Maternal Mortality Ratio remains very high – Infant Mortality Rate: 95 Infant Mortality Rate: 95 66 66– Under Five Mortality Rate: 124 Under Five Mortality Rate: 124 83 83– HIV prevalence: HIV prevalence: 0.6% 0.6%– Maternal Mortality Ratio: 437 Maternal Mortality Ratio: 437 472 472

Per Capita Health Expenditure (2005): total 37US$ from which Per Capita Health Expenditure (2005): total 37US$ from which 25US$ (68%) Out of Pocket, 22% donors, 10% Government25US$ (68%) Out of Pocket, 22% donors, 10% GovernmentHuman Resources: mal distribution, important shortage of midwives, Human Resources: mal distribution, important shortage of midwives, very low government salaries, non regulated private practice by civil very low government salaries, non regulated private practice by civil servantsservants, , limited managerial capacitieslimited managerial capacities

Provision of Basic Health Services Provision of Basic Health Services ProjectsProjects

Two Bilateral Projects, started in 2004, 4-year period, 8,750,000 Euro Two Bilateral Projects, started in 2004, 4-year period, 8,750,000 Euro

3 provinces: Siem Reap, Otdar Meanchey, Kampong Cham (3/10 3 provinces: Siem Reap, Otdar Meanchey, Kampong Cham (3/10 Operational Districts)Operational Districts)

Co-management => co-decision/implementation by PHD and Co-management => co-decision/implementation by PHD and Operational Districts Operational Districts

Both PBHS projects aim at Both PBHS projects aim at improving the health, especially of mothers improving the health, especially of mothers and children, thereby contributing to poverty and socio-economic and children, thereby contributing to poverty and socio-economic development of the Provincedevelopment of the Province– 6 Project Components (6 Project Components (in line with 6 Key areas of work of the National Health Strategic in line with 6 Key areas of work of the National Health Strategic

Plan 2003-2007)Plan 2003-2007)Health Equity Funds (Contracted out to Consumer Right’s Organizations) Health Equity Funds (Contracted out to Consumer Right’s Organizations) Performance ContractingPerformance ContractingBehavioral Change CommunicationBehavioral Change CommunicationQuality ImprovementQuality ImprovementHuman Resource DevelopmentHuman Resource DevelopmentInstitutional Capacity Strengthening Institutional Capacity Strengthening

BTC Health Projects in CambodiaBTC Health Projects in Cambodia

Provision of Basic Health Services in Siem Reap and Otdar Meanchey

Provision of Basic Health Services in Kampong Cham Province

Basic Assumptions ~ PerformanceBasic Assumptions ~ Performance

What was the set-up of PBHS? (1)What was the set-up of PBHS? (1)Partial answer to two main Human Resource problems:Partial answer to two main Human Resource problems:

very low salaries very low salaries Staff reward and sanction system is not functionalStaff reward and sanction system is not functional

Built on successful experience by MSF with performance contracts and Built on successful experience by MSF with performance contracts and HEF in Sotnikum Operational District (OD), “New Deal” HEF in Sotnikum Operational District (OD), “New Deal” but with expansion to provincial level but with expansion to provincial level

⇒ PHD/Project contracting ODs & Referral Hospitals PHD/Project contracting ODs & Referral Hospitals ⇒ ODs contracting Health CentersODs contracting Health Centers

Contracts with institution not with individual staffContracts with institution not with individual staffInstitution contracts with individual staffInstitution contracts with individual staff

Contracts cover staff incentives + HEF + support to training, HEF, BCC, Contracts cover staff incentives + HEF + support to training, HEF, BCC, quality improvementquality improvement => 1 FTE = available x motivated x competent staff) => 1 FTE = available x motivated x competent staff)only: very limited project support for other operational aspectsonly: very limited project support for other operational aspects

Total number of staff 1,642 in 3 PHDs, 8 ODs, 109 HC, 9 hospitalsTotal number of staff 1,642 in 3 PHDs, 8 ODs, 109 HC, 9 hospitals

Long preparation phase with intensive staff participation (all contracts Long preparation phase with intensive staff participation (all contracts were in place by end 2005)were in place by end 2005)

What was the set-up of PBHS? (2)What was the set-up of PBHS? (2)

Dynamic contracts dealing with changing financial situation (inflation, Dynamic contracts dealing with changing financial situation (inflation, user fee income) and new coping mechanismsuser fee income) and new coping mechanisms – Changing of incentivesChanging of incentives– Changing of indicators and targets (process and output indicators)Changing of indicators and targets (process and output indicators)– Changing monitoring and scoring mechanisms Changing monitoring and scoring mechanisms

ODs and PHD responsible for monitoring and scoring, => development ODs and PHD responsible for monitoring and scoring, => development of a new department/unit to deal with these responsibilitiesof a new department/unit to deal with these responsibilities

2 Cambodian Technical Assistants (project staff) responsible for 2 Cambodian Technical Assistants (project staff) responsible for conception and adaptation of system, coordination, controlling conception and adaptation of system, coordination, controlling

BTC contribution towards Incentives in 2007: 749,000 USDBTC contribution towards Incentives in 2007: 749,000 USD

Project Incentives contribution pooled with other income (user fees, HEF) Project Incentives contribution pooled with other income (user fees, HEF)

Fair Deal for the Health Staff…Fair Deal for the Health Staff…

Respect of attendance as agreedHalf-time or full-time

Respect golden rulesNo under-table paymentTransparency UF-GoC budget –

CMS Drugs & equipments No poaching of patients to private

sector

UF + (HEF) + GoC

+ PBHS funds (decreasing)

+ Others (MSF,…)

Motivating incentivesSufficient Rec. Costs

GIVEGET

…….but even better on ‘the other side’? .but even better on ‘the other side’?

– Nursing Staff average total monthly incomeNursing Staff average total monthly income– Total (Private + Public Sector):150-300$Total (Private + Public Sector):150-300$– From Public Sector only: 150$ (incentives 50-100$ + From Public Sector only: 150$ (incentives 50-100$ +

Salary)Salary)

– Physicians average total monthly income: Physicians average total monthly income: – Total (Private + Public Sector): 1000-2000$Total (Private + Public Sector): 1000-2000$– From Public Sector only: 230$ (incentives 125-150$ + From Public Sector only: 230$ (incentives 125-150$ +

Salary)Salary)

What are the results? (1)What are the results? (1)Findings based on September 2008 evaluation of PBHS-Kampong Cham (=>Kampong Findings based on September 2008 evaluation of PBHS-Kampong Cham (=>Kampong Cham biased), House Hold Survey (baseline versus follow up), the Mid Term Review, HIS Cham biased), House Hold Survey (baseline versus follow up), the Mid Term Review, HIS data and observations by project teamdata and observations by project team

Confounding factors (changing performance incentives and quality assessment systems) Confounding factors (changing performance incentives and quality assessment systems)

Good understanding by staff of the current incentive system Good understanding by staff of the current incentive system

Very Transparent (procedures and implementation)Very Transparent (procedures and implementation)

Increased commitment nurses to work in public health sector because Increased commitment nurses to work in public health sector because of important increased income from public sector (<= total earning of of important increased income from public sector (<= total earning of staff = Public sector through incentives and salaries + private sector)staff = Public sector through incentives and salaries + private sector)

But less so for physicians, income from private sector proportionally But less so for physicians, income from private sector proportionally much bigger)much bigger)

What are the results? (2)What are the results? (2)Increase in outputs and coverage rates:Increase in outputs and coverage rates:

– HC consultations per capitaHC consultations per capita: initial increase from 0.50 in 2005 to : initial increase from 0.50 in 2005 to 0.90 in 2006 back 0.61 in 2007 (nationwide drop attributed to lack of 0.90 in 2006 back 0.61 in 2007 (nationwide drop attributed to lack of drugs)drugs)

– HospitalizationsHospitalizations per 1,000 persons: large increase, from 10 in per 1,000 persons: large increase, from 10 in 2005 to 18 in 2007, much bigger than national trend, important 2005 to 18 in 2007, much bigger than national trend, important influence of HEFinfluence of HEF

– ANC2 coverageANC2 coverage: large increase, from 71% in 2005 to 85% in 2007, : large increase, from 71% in 2005 to 85% in 2007, much bigger than national trendmuch bigger than national trend

– Deliveries at Health FacilitiesDeliveries at Health Facilities: large increase, from 10% in 2005 to : large increase, from 10% in 2005 to 22% in 200722% in 2007

– Deliveries by Trained AttendantsDeliveries by Trained Attendants: large increase, from 33 % in : large increase, from 33 % in 2005 to 43% in 20072005 to 43% in 2007

– Family PlanningFamily Planning: slight increase, from 21% in 2005 to 24% in 2007: slight increase, from 21% in 2005 to 24% in 2007– Immunization coverageImmunization coverage (fully immunized): substantial increase, (fully immunized): substantial increase,

from 59% in 2005 to 70% in 2008 (survey data)from 59% in 2005 to 70% in 2008 (survey data)– MalnutritionMalnutrition: no improvement (survey data): no improvement (survey data)– Infant MortalityInfant Mortality (per 1000) decreased from 89 in 2005 to 73.4 in (per 1000) decreased from 89 in 2005 to 73.4 in

2008 (survey data; but not significant (small sample size?))2008 (survey data; but not significant (small sample size?))

What are the results? (3)What are the results? (3)Quality of Services as observed by evaluation teamQuality of Services as observed by evaluation team– Technical quality of consultations at HC average for Cambodia Technical quality of consultations at HC average for Cambodia

(consultation equal to provision of medicine)(consultation equal to provision of medicine)– Quality of Hospital Care better than Cambodian averageQuality of Hospital Care better than Cambodian average

User fee Revenue of (Self paying + HEF)User fee Revenue of (Self paying + HEF)– Kampong Cham Provincial Hospital increased from 185,000$ in 2005 Kampong Cham Provincial Hospital increased from 185,000$ in 2005

to 281,000$ in 2007to 281,000$ in 2007– Average annual hospital revenue for the 3 KC District Hospitals Average annual hospital revenue for the 3 KC District Hospitals

increased from 7,700$ in 2005 to 44,000$ in 2007increased from 7,700$ in 2005 to 44,000$ in 2007– Average annual HC revenue in the 3 KC ODs increased from 370$ in Average annual HC revenue in the 3 KC ODs increased from 370$ in

2004 to 1,535$ in 2007 2004 to 1,535$ in 2007

What are the lessons? (1)What are the lessons? (1)Subsidies based on % of target and without bonuses for results above Subsidies based on % of target and without bonuses for results above target < motivating than subsidies per case or subsidies which reward target < motivating than subsidies per case or subsidies which reward performance without a maximum cap.performance without a maximum cap.

Combination of user fee revenue (augmented by HEFs/vouchers for the Combination of user fee revenue (augmented by HEFs/vouchers for the poor) and subsidies => satisfactory wage through public sector work for poor) and subsidies => satisfactory wage through public sector work for midwives and nurses. midwives and nurses.

Physician earnings from public sector work remain very small relative to Physician earnings from public sector work remain very small relative to their total earnings => low motivation for public sector work their total earnings => low motivation for public sector work R/ need for mechanisms to regulate private practice by public sector R/ need for mechanisms to regulate private practice by public sector physicians or even integrate private practices into public facilities physicians or even integrate private practices into public facilities

Acceptable capacity of OD and PHD monitoring teams and newly Acceptable capacity of OD and PHD monitoring teams and newly established Provincial Health Financing Unitsestablished Provincial Health Financing Units

What are the lessons? (2)What are the lessons? (2)Self-evaluation and self-scoring for PHD level gives biased resultsSelf-evaluation and self-scoring for PHD level gives biased results

Effect performance contracting on outputs is reduced when incentives are primarily Effect performance contracting on outputs is reduced when incentives are primarily based on process indicatorsbased on process indicators..

In order for performance contracting to reach its potential with regard to utilization In order for performance contracting to reach its potential with regard to utilization of curative care and to become financially sustainable, need for :of curative care and to become financially sustainable, need for :– Reliable and adequate drug suppliesReliable and adequate drug supplies – Improved interpersonal and technical quality of care Improved interpersonal and technical quality of care – Responsive service hours Responsive service hours – Addressing problem of demand for treatments (IVs etc) contrary to MoH protocolAddressing problem of demand for treatments (IVs etc) contrary to MoH protocol

Increasing access to private clinics/pharmacies (~ socioeconomic development), Increasing access to private clinics/pharmacies (~ socioeconomic development), will undercut utilization of public services unless perceived Q issues are tackled.will undercut utilization of public services unless perceived Q issues are tackled.

Limited impact on clinical quality of care (multi-factorial; difficult to monitor)Limited impact on clinical quality of care (multi-factorial; difficult to monitor)

Contracting fatigueContracting fatigue

ConclusionConclusionCombined with other strategies as HEF, Training, BCC and Quality Combined with other strategies as HEF, Training, BCC and Quality Improvement the Performance Based Incentive Scheme implemented by the Improvement the Performance Based Incentive Scheme implemented by the System (PHD and OD) in the context of a bilateral project contributed System (PHD and OD) in the context of a bilateral project contributed significantly to the motivation of the health personnel and hence to increased significantly to the motivation of the health personnel and hence to increased utilization of health services and and coverage rates and this at the extended utilization of health services and and coverage rates and this at the extended scope of three provincesscope of three provinces

What does the future bring? (1)What does the future bring? (1)Public Act ReformPublic Act ReformObj: institutionalization and appropriation of contracting and Obj: institutionalization and appropriation of contracting and performance incentives by Cambodian Governmentperformance incentives by Cambodian Government

– Incentive schemes:Incentive schemes:

MBPI (‘back office’ staff) MBPI (‘back office’ staff) No additional topping-ups!No additional topping-ups!

Functional an analysis: what about staff without contract?Functional an analysis: what about staff without contract?

PMG (‘front office’ staff)PMG (‘front office’ staff)

Incentives midwivesIncentives midwives

Proportion user fees for staff incentives 40-> 60%Proportion user fees for staff incentives 40-> 60%

HEFHEF

Yearly salary increases up to 15%Yearly salary increases up to 15%

– Service Delivery GrantsService Delivery Grants

What does the future bring? (2)What does the future bring? (2)– Service delivery grantsService delivery grants

Partner financing mechanism of the second Health Sector Partner financing mechanism of the second Health Sector Support Program (HSSP2) with growing counterpart contributionSupport Program (HSSP2) with growing counterpart contributionObj: More autonomy, responsiveness, quality and efficiencyObj: More autonomy, responsiveness, quality and efficiencyGrants to SOA (OD and Referral Hospitals) based on AOP Grants to SOA (OD and Referral Hospitals) based on AOP Through PHDThrough PHDFor recurrent costs and capacity reinforcement onlyFor recurrent costs and capacity reinforcement onlyIncludes management targetsIncludes management targetsVariation ~pop, ~performance, ~other incomes = ?Variation ~pop, ~performance, ~other incomes = ?

What does the future bring? (3)What does the future bring? (3)

PBHS2, a 3-year consolidation phasePBHS2, a 3-year consolidation phase

Alignment to incentive schemes and SDGAlignment to incentive schemes and SDG

Harmonization through partnership HSSP2 as a ‘discrete, non-Harmonization through partnership HSSP2 as a ‘discrete, non-pooling partner’pooling partner’

HEFHEF

8 OD + 9 Referral Hospitals: SDG with techn/managerial CR8 OD + 9 Referral Hospitals: SDG with techn/managerial CR

PHD: support in managing + monitoring SDGPHD: support in managing + monitoring SDG

Central MOH: ‘Information and Evidence for Policy’Central MOH: ‘Information and Evidence for Policy’

=> More sector wide approach=> More sector wide approach

Income for the staff in US$Average monthly income over all staff in the province,

foressen trend

0

50

100

150

200

250

2004 2005 2006 2007 2008 2009

PBHS Boosting

CBHI

60% HEF-paid fee60% User fee

Grey

Delivery BonusPMG

AllowanceNight duty

Salary

Governm

entU

sers

Ownership-Quality-Management

1st Phase 2nd Phase

Expected Evolution of Financing Sources Expected Evolution of Financing Sources for Operational Costs and Performance Incentivesfor Operational Costs and Performance Incentives

% of required financing

0

20

40

60

80

100

2004 2005 2006 2007 2008 2009 2010 2011 20.. 20..

Financial Boosting

Government

User Fees SHI

HEF

Some general questions (1)Some general questions (1)Do we keep a comprehensive view on health and on HR Do we keep a comprehensive view on health and on HR management? Is there ‘Collateral damage’? Equity for the management? Is there ‘Collateral damage’? Equity for the users? Role of integrated formative supervision? users? Role of integrated formative supervision?

What about non-financial incentives? Public appreciation for What about non-financial incentives? Public appreciation for excellence?excellence?

Cost and workloas of the inevitable control mechanisms? Cost and workloas of the inevitable control mechanisms? Opportunity cost? Risk of ‘nivellation’?Opportunity cost? Risk of ‘nivellation’?

Some general questions (2)Some general questions (2)How equitable can performance monitoring become How equitable can performance monitoring become (‘handicap’ of individual HC)? Effect on motivation? (‘handicap’ of individual HC)? Effect on motivation?

How much appropriation by government? Or temporary How much appropriation by government? Or temporary partner financing mechanism?partner financing mechanism?

Place of field interventions in times of increasing budget Place of field interventions in times of increasing budget support? Alignment to field needs? support? Alignment to field needs?

How can we better link field interventions and scientific How can we better link field interventions and scientific coaching => capitalisation? coaching => capitalisation?

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