Results-Based Financing (RBF) in the Health Sector in Burkina Faso: Implementation and Expenditure Patterns (January 2014 to December 2015) By: Gérard W. NONKANI, Richard BAKYONO, Boukary TAPSOBA Introduction Several evaluations and joint reviews have shown that Burkina Faso has one of the most unfavorable health profiles in the West African sub-region. Relatively high levels of infant and child mortality (141.9 per 1000), maternal mortality (307 per 100,000 live births) and fertility rates (about 6.8 children per woman) were associated with a relatively high prevalence of HIV/AIDS (approximately 2 percent) 1. Despite the implementation of many health initiatives and reforms, the prospect of reaching the Millennium Development Goals by the end of 2015 was virtually unlikely. Thus, to help improve the performance of the health system, the country with the support of its technical and financial partners introduced Results Based Financing (RBF) in the health sector in April 2011, focusing on three health districts. Subsequently, thanks to a grant from the World Bank, the project was expanded in January 2014. The strategy is now being implemented in 19 health districts in six regions, namely the Boucle of Mouhoun, Center-East, Center-West, Center-North, the North and the South-West. In contrast to inputbased approaches, RBF buys results. I. Importance of the structure of expenditure in RBF The structure of expenditures in RBF breaks down expenditures either per activity item, function or recipient. It facilitates the assessment of specific expenditures in relation to overall expenditures. This allows us to assess the rationality of RBF expenditures in Burkina Faso, and use the information to convince of the efficiency of this health system financing approach which could be appropriate in other sectors and other countries. It informs of the size of the different types of expenditure in an RBF program. In addition, analyzing RBF expenditures allows us to inform government departments of the additional costs of a "hybrid" RBF program. We can break down the available information on expenditures in terms of: Average expenditure for one year of implementation; Expenditure per component (minimum and complementary packages of services, quality bonus / quality improvement bonus) versus administrative or general costs (contract development and verification agency, regulatory activities, payer of services, RBF technical advice, etc.) Per capita expenditure; Expenditure by type of activity (setting up the structures needed to implement the strategy, elaboration and dissemination of basic documents, information / training of stakeholders, negotiation of contracts, verification of performance, coaching providers, payment of subsidies, monitoring and evaluation, coordination and regulation, external technical support...); Expenditure by function (regulation, service delivery, verification and payment) ; Expenditure by level of the health system (central, intermediate, peripheral); Expenditure on investments in the health system. 1
The study also tries to find concrete solutions to a crucial problem that concerns the technical and financial partners in general and the World Bank in particular, which remains the main support of African countries in the execution of RBF pilot programs: government funding must be secured sooner or later. II. Methodology The purpose of this study was to determine the expenditure incurred for the implementation of the RBF strategy from January 2014 to December 2015 in Burkina Faso. The research questions are as follows: - What is the cost of implementation of RBF in Burkina Faso? - What were the expenditure categories (transaction cost / input, cost of purchase of output / output)? - What is the technical efficacy (Input / Output) in the implementation of the FBR? - What is the distribution of total costs by health system level (central, intermediate and peripheral)? - What has been the source of funding for these incurred costs? Secondary quantitative data was used. The data was collected from the Technical Service in charge of the coordination of RBF strategy implementation and the Health Development Support Program (HDSP), which is the fiduciary agency of the Ministry of Health. Thus, the costing done in 2013 at the start of the strategy, the HDSP accounting documents, the monthly and annual financial reports from the health financing department /RBF and the project documents were also used. III. Results and analysis a) Total expenditure for the period of January 2014 to December 2015 For the period from January 2014 to December 2015, the total amount of RBF funding incurred in the RBF component is US$ 22,318,287 2 as shown in the table below. For an estimated population of 4,518,267 inhabitants, the RBF approach would have on average contributed USD 2.47 per year per person to improve the health status of each inhabitant in the area of intervention. The strategy covers approximately 644 health centers of the 1st level, 20 Medical Centers, 11 Medical Centers with Surgical Services (MCSS) and 4 Regional Hospital Centers. The total expenditure amounts are US$ 9,873,092 in 2014 and US$12,445,195 in 2015. These expenditures are in addition to input-based funding, which health facilities in the area also receive. Table n 1: Total expenditure for the period 2014-2015 in US$ Item/Year 2014 2015 Total Expenditure Total Expenditure (US$) 9,873,092 12,445,195 22,318,287 Annual Average Expenditure 11,159,143.5 This envelope was used to finance the administrative or management costs for the implementation of the strategy, quantity payments, quality bonus and performance bonuses to all the structures of the intervention area. The administrative or management costs include all activities such as monitoring, supervision, control, verification, acquisition of equipment and rolling logistics, workshops, meetings / consultations, production and dissemination of documents, payment of salaries 2 The exchange rate used is 456,27 francs CFA for 1 US dollar (US$). 2
and related benefits to national technical assistants, resource transfer costs, performance bonus to supervisory agencies which are also under contract, such as District Health Management Teams, Regional Health Offices and central level structures, etc. Payments are made by the payer to the health facilities (Health and Social Promotion Centers, MCSS and Regional Hospital Center) determined on the basis of their monthly and quarterly performance. b) Expenditure per component versus administrative costs The budget for RBF was used mainly for the quantity payments and quality bonuses for healthcare providers, up to 71 percent in 2015 of the total amount spent, compared with 69 percent for 2014. Funds were also used to conduct monthly and quarterly performance evaluations, to carry out monitoring activities, to provide various types of technical support, for operating costs of the RBF Unit (including salaries), the preparation, reproduction and dissemination of documents, the acquisition of transportation required for implementation, training / information and payment of performance bonuses to the District Health Management Teams (DHMTs) and Regional Health Offices, and resource transfer costs, etc., 29 percent in 2015 compared to 31 percent in 2014. It can be noted that the total amount paid to health facilities increased between 2014 and 2015. Moreover, over the entire period covered by this analysis, it can be noted that the total amount spent on care providers represents 70 percent of total expenditure. The table below illustrates this situation. Table n 2: Expenditure per subsidy component versus administrative costs in US$ Item/Year 2014 2015 Altogether period 2014-2015 Expenditure Percentage Expenditure Percentage Expenditure Percentage Quantity payments, quality bonus 6 802 906 69% 8 867 126 71% 15 670 032 70% Operating cost in the broad sense 3 070 186 31% 3 578 069 29% 6 648 255 30% Total expenditure by period 9 873 091 100% 12 445 195 100% 22 318 287 100% The operating cost of US$ 6,648,255 (period 2014-2015), representing 30 percent of the expenditures of the two years, is shown in the table above. This table shows the distribution of expenditure by of activity (facility payments vs operational costs) during the period 2014-2015. One should note the non-recurring costs each year such as the preparation and the dissemination of basic documents (national manual, training manual, communication document, etc.). This is also the case during the national scale up such as the cost of international expertise, which is generally required at the start of implementation. 3
Items Table n 3: Expenditures by type of activities in US$ 2014 2015 Altogether period 2014-2015 Expenditure by Percentage Expenditure by Percentage Expenditure by Percenta ge Administrative and Management Costs Training 283 803 2,9% 583 003 4,7% 866 806 3,9% Consultation 183 363 1,9% 174 344 1,4% 357 707 1,6% Verification 1 961 455 19,9% 2 182 674 17,5% 4 144 129 18,6% Monitoring/ Supervision 269 886 2,7% 254 934 2,0% 524 820 2,4% Operating cost 269 886 2,7% 320 592 2,6% 590 478 2,6% Communication 56 388 0,6% 43 125 0,3% 99 513 0,4% Study / Evaluations 45 405 0,5% 19 397 0,2% 64 802 0,3% Total Administrative and 31,1% 28,8% Management Costs 3 070 186 3 578 069 6 648 255 29,8% Total Quantity Subsidies, 68,9% 71,2% quality bonus 6 802 906 8 867 126 15 670 032 70,2% Total expenditure by Period 9 873 092 100% 12 445 195 100% 22 318 287 100% The monthly quantitative and the quarterly qualitative verification of health facilities and the evaluation of performance of supervisory structures represent 18.6 percent of the total expenditure. In addition, trainings in terms of capacity building for stakeholders, monitoring / supervision / verification done at the different levels (central, intermediate and peripheral) and operating costs represent respectively 3.9 percent, 2.4 percent and 2.6 percent of total expenditure. c) Expenditures by RBF function Regulation includes strategies and tools used to optimize the implementation of the RBF strategy in the health sector by correcting dysfunctions. It is necessary to guide the behavior of the actors in the system towards agreed objectives. It focuses on the application of Ministry of Health standards and guidelines, and is usually overseen by the Secretary General through the central and decentralized departments of the health sector. The function of care provider is vested to health facilities (CHSP / Medical Center, MCA and RHC). Providers in the context of RBF are those delivering both clinical and non-clinical services. These include health care services, diagnostic support services (laboratory, medical imaging), pharmacy, administrative and support services. The care provider is the entity that signs the performance contract with the Contract Development and Verification Agency for providing quality services. Verification ensures the services are delivered and their quality. It takes place at two levels: at the service level, a verification on quantity and technical quality; at the community level, a verification of the quality perceived by users. Performance verification or evaluation is based on regular reporting procedures and community level surveys. In Burkina Faso, the verification of quantity services and community verification are carried out by a Contract Development and Verification Agency. The verification of quality services is carried out by teams composed of DHMT for Health facilities at firstlevel of health system and by teams of peers for regional hospitals. The payer is the department responsible for paying providers based on the results achieved, verified and certified by the verifiers according to the budget available and in accordance with agreed rules and prices. In Burkina Faso, this role is played by the HDSP. Payment focuses on transferring performance bonuses to providers. 4
We have classified the costs expended in 2014 and 2015 by RBF function. The table below shows expenditures by RBF function. Table n 4: Expenditures by RBF function in US$ Items 2014 2015 Altogether period 2014-2015 Expenditure by Percentage Percentage Expenditure by Percentage Expenditure by Regulation 951060 10% 1297047 10% 2248107 10% Care provision 6802906 69% 8867126 71% 15670032 70% Verification 1961455 20% 2182674 18% 4144129 19% Payment 123605 1% 98348 1% 221953 1% Total Expenditure 9839026 period 100% 12445195 100% 22318287 100% Over the period 2014-2015, expenditures were primarily for care provision, 70 percent, followed by the verification function, 19 percent. The payment function receives the lowest percentage of total expenditure, 1 percent. d) Expenditure by recipient (central, intermediate and operational levels) The analysis of incurred expenditures indicates that transfers of financial resources were made to the following departments: the Department in charge of RBF, six Regional Health Offices 3, nineteen Health districts involved in the implementation of RBF 4, and six Contract Development and Verification Agencies. The table below shows the status of expenditures by level of the health system. Table n 5: Expenditures from January 2014 to December 2015 by the level of the health system in US$ Level/Structure Amount spent Percentage Central Level 1801482 8% Intermediate Level 849026 4% Operational Level (health districts) 17042807 76% Total Funding of the sector 19693315 88% Private Agencies (Contract Development and Verification Agencies) 2624972 12% Total 22318287 100% The expenses incurred are distributed as follows: - central structures composed of the General Office of Studies and Statistics, and HDSP, 8.7 percent, - intermediate structures composed of the regional health offices involved (Boucle of Mouhoun, Center-East, Center-West, North-Center, North, South-West), 4 percent - operational structures composed of 15 health districts including the four RHCs, 76 percent. 3 Regions of Boucle of Mouhoun, Center-East, Center-West, North-Center, North, South-West 4 Health Districts of Nouna, Solenzo, Léo, Sapouy, Koudougou, Ouargaye, Tenkodogo, Kaya, Boulsa, Kongoussi, Ouahigouya, Titao, Gourcy, Batié et Diébougou 5
Expenditures for Contract Development and Verification Agencies that began operating in September 2014 amounted to US$ 2,624,972 that is to say 12 percent of total expenditure over the two years of implementation. Expenditures were particularly high at the operational level. IV. Source and sustainability of funding strategy During the period from January 2014 to December 2015, the financing of the implementation of RBF in Burkina Faso was based on the financial resources of the project managed by the HDSP. These financial resources come from a grant from the World Bank to the Government of Burkina Faso. The HDSP plays the role of payer in the institutional framework, and is a joint initiative of the Ministry of Health and some of its health development partners with the objective of the improvement of coordination and rational management of resources mobilized for the implementation of the National Health Development Plan. It was set up in 2005 and it has been the common basket fund for the health department. It currently gathers two modalities of financial arrangements, namely: the common basket: all the funds of certain technical and financial partners (TFPs) are fungible and non-targeted; the targeted funds of some TFPs that have decided to support specific activities or specific structures (thematic and / or geographical targeting); The funds for the implementation of the RBF can be accommodated in this last method. However, it should be noted that the World Bank remains, up to now, the main source of funding. Nonetheless, considering the size of the funding needs revealed by this paper, it is necessary to mobilize resources from the Government and other partners. The intervention of the World Bank is part of a four-year project, with the possibility of additional funds. It is clear that, at the national level, a sustainable RBF will need a well-financed health sector. The commitment of the Government through the national budget is invaluable. The government could create a specific budget line in the Finance Act or a conversion of some delegated credits already available into results-based credits. V. Funding In two years of implementation, a total amount of US$22,318,286 has been spent, fully supported by the World Bank. Expenditures made in 2015 represent 15 percent of the health operational budget of the Ministry of Health, excluding salary and excluding investment. During the period 2014-2015, there has been no payment default, but the trends in the monthly disbursement rate, about US$767,090 for facility payments, and operational activities, will inevitably lead to a funding GAP. Other partners such as UNFPA, UNICEF, Global Fund, GAVI Alliance, etc., can give their support to finance the strategy. Their missions are sufficiently considered throughout the strategy. For example, subsidized activities range from general counseling, malnutrition, labor and delivery surveillance, family planning, tuberculosis, HIV, etc. The annual financial resources needed to maintain the strategy in 19 districts were assessed on the assumption that the current institutional framework would be maintained at US$ 13 million and at US$ 59 million for the scale up to the whole country. However, for national coverage, a reduction in the estimated total cost can be obtained through an improvement in the implementation mechanism, thus creating economies of scale. 6
Conclusion The shift from an input / means-based model to a results-based approach (results-based financing) is dependent on several challenges. In Burkina Faso, the strategy of RBF is foreseen in the national strategy documents (National Health Policy, National Health Development Plan). There is an implementation manual. The political will is there. It is even expressed through the participation of the authorities in the consultation frameworks related to the strategy, the facilitation of implementation on the ground through acts and documents, and especially the good working conditions of the technical service staff. However, this has not yet been translated into a specific contribution through a budget line dedicated to RBF or another modality. Therefore, there is a necessity for RBF that the current budget procedures for the Government may undergo some changes over time. Implementation of the RBF strategy must be based on predictable funding and the involvement of the Ministry of Finance is encouraged as soon as possible. The pursuit of the strategy is carried out in a national context in pursuit of a rational use of financial resources of the Government as well as those of partners. At the international level, in the context of economic crisis, resizing or even reorienting interventions by partners in development happens and disrupts RBF funding. But, clearly RBF is an appropriate mechanism in response to the July 2012 Joint Declaration, held in Tunis, by African Finance and Health Ministers on Resource optimization, Sustainability and Accountability in the health sector. For internal funding, government budget procedure could challenge the ability of the Directorate for Administration and Finance to become a payer, as in the Support Program for Health Development. There is therefore a need for RBF that the current procedures of the Government budget would undergo some changes. The quantitative and qualitative results obtained, the strengthening of the organization of services and care delivery, the improvement of the health information system and the establishment of this systematic culture of accountability are all factors to undertake indispensable reforms on public finances. However, one of the major challenges of the results-based financing approach remains the use of transferred resources. The activity of the health facilities generally results in the monthly transfer of several million FCFA to their benefit. The difficulties in the disbursement procedures mixed with the weak management capacity of health workers and the requirements for the use of tools such as the Performance Improvement Plan (PIP) and the indices tool, especially in lower level health facilities, lead to the non-expenditure of transferred funds in most health facilities. 7