Introduction of Performance Based Financing in Burundi associated with improvements in care and quality

Several governments in low- and middle-income countries have adopted performance-based financing to increase health care use and improve the quality of health services. We evaluated the effects of performance-based financing in the central African nation of Burundi by exploiting the staggered rollout of this financing across provinces during 2006-10. We found that performance-based financing increased the share of women delivering their babies in an institution by 22 percentage points, which reflects a relative increase of 36 percent, and the share of women using modern family planning services by 5 percentage points, a relative change of 55 percent. The overall quality score for health care facilities increased by 45 percent during the study period, but performance-based financing was found to have no effect on the quality of care as reported by patients. We did not find strong evidence of differential effects of performance-based financing across socioeconomic groups. The performance-based financing effects on the probability of using care when ill were found to be even smaller for the poor. Our findings suggest that a supply-side intervention such as performance-based financing without accompanying access incentives for poor people is unlikely to improve equity. More research into the cost-effectiveness of performance-based financing and how best to target vulnerable populations is warranted.