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Cordaid NL
Health care Ethiopia

Performance based financing program in Ethiopia expands to coffee growing highlands

In 2015 Cordaid successfully introduced performance based financing (PBF) of health facilities in the pastoralist drylands of Borana, in Southern Ethiopia. With support of the Dutch Embassy and in collaboration with the Oromia Regional Health Bureau, Cordaid now expands its PBF approach to strengthen the health system in the farming highlands of the Jimma zone. “It’s a completely different challenge”, says Health Expert Inge Barmentlo.

(May, 2017. Maternal and child healthcare provision in the clinic of Diidi Yabello (Borana, Ethiopia). This is one the Cordaid supported clinics of Borana. © Petterik Wiggers)

The pastoralist drylands of Borana are one of Ethiopia’s most underprivileged and underserved areas. This is where Cordaid wished to improve access and quality of essential healthcare, back in 2015. “Droughts often occur and resource-related conflicts between pastoralists are common. This is further complicated by the fact that pastoralist families, during the dry season,  move around in search of pasture and water. This causes utilization of healthcare services to be very low. On top of that the quality of services is low as well”, Barmentlo explains. “Yet given the harsh conditions, especially for mothers and children, access to quality care is essential.”

Scaling up performance based financing in Borana

In collaboration with the  Oromia Regional Health Bureau, Cordaid, in the PBF role of purchaser and verifier, contracted a number of health facilities in Borana. Initially we worked with 1 hospital and 8 health centers, with a primary catchment population of 126.000 people. Three years later, after

Inge Barmentlo, Program manager at Cordaid’s Healthcare Unit.

promising results, we scaled up to more districts, covering 2 hospitals and 23 health centers, reaching a population of nearly half a million.

“Facilities receive quarterly payments, based on previously agreed performances and thorough verification of quality and quantity indicators. These performances  mainly focused on maternal and child care, but not solely”, Barmentlo says. Health staff autonomously uses these extra quarterly payments – up to 4000 USD per health center –  to invest in their facilities. “Health facilities have limited access to cash. They do receive assets in kind, for example drugs or equipment. The cash they earned via the PBF project allowed them to create and implement business plans for their facilities”, Barmentlo continues. Typical investments include the refurbishment of facilities, the procurement of essential drugs but also larger investments like solar energy systems.

Significant results

The results are significant. Quality of services verifiably improved, the accuracy of health data improved, patient satisfaction increased and staff motivation went up – as up up to 30% of the payments could be spent on topping up salaries. And, most importantly, more patients were attracted to health centers.

Read more about PBF health program in Borana.

Expanding to coffee growing highlands

Results in Borana, shared during an exposure visit with Dutch Embassy staff and Dutch parliamentarians, inspired Cordaid Health staff to expand interventions to the Jimma zone, a wholly different setting in Ethiopia. This was done in consultation with the Oromia Regional Health Bureau. “The Jimma zone of the Oromia region mainly consists of farming highlands. This area is famous for its high quality coffee. Geographically it is the opposite of Borana. It is also more densely populated. Here, we plan to contract 65 health centers and 5 hospitals, spread over 13 districts, with a catchment population of 1,8 million people”, says Barmentlo. “Given the population density, the sedentary life style of farming communities and the larger number of health facilities in the area as compared to Borana, our focus will be less on improving access and more on improving the quality of services. Especially of mother and child care”, Barmentlo continues.

“The prevention of stockouts of essential drugs, the availability of medical equipment, better waste disposal, overall hygiene and infection control, staff motivation and patient satisfaction… All these improvements make up for an overall better performing healthcare system.”

Inge Barmentlo, Program manager at Cordaid’s Healthcare Unit

The Jimma program, approved and supported by the Dutch Embassy, will be implemented between April 2019 and 2023. “With a per capita cost of 2 euro, 1,8 million people will be able to rely on a more performing health system, providing better care”, according to Barmentlo.

Funding results, not promises

One of Cordaid’s partners in this program is Proof of Impact. Proof of Impact is a platform that easily enables anyone to effectively support the causes they care about most by linking their financial investment directly to proven results. The Amsterdam-based startup wants to enable donors to fund results, not promises. Iulian Circo, Proof of Impact Co-founder: “This partnership is a milestone and a global premiere in performance based financing models. We are applauding the leadership of The Ethiopian Government, Cordaid and The Netherlands Ministry of Foreign Affairs in driving the application of exponential technology and innovative economic models in their quest for impact and sustainability. As a young startup, Proof of Impact is thrilled to join them on this journey”

Strengthening health systems

In the Jimma zone program, as in any PBF intervention, pre-agreed performances will be verified according to a comprehensive set of indicators. “Apart from quantity indicators like the number of assisted deliveries, immunizations and OPD services, we focus on a range of quality indicators”, Barmentlo explains. “These include the prevention of stockouts of essential drugs, the availability of medical equipment, better waste disposal, overall hygiene and infection control, staff motivation and patient satisfaction. All these improvements make up for an overall better performing healthcare system.”

PBF and health insurance

One of the more interesting side-effects of PBF program in health, could be that it is also beneficial to the Community Based Health Insurance. CBHI is one of the key interventions in Ethiopia to achieve Universal Health Coverage. “Health data accuracy improves with performance based financing, due to thorough verification in health facilities as well as among patients”, Barmentlo concludes. “In Borana we saw that staff of the community based health insurance in the health district could handle claims more efficiently thanks to the improved data quality in Borana. This shows that performance based financing and health insurance systems can reinforce one another. They improve both access and quality of healthcare services. In more stable and accessible areas like Jimma, but also in the more fragile areas like Borana.”

Read more

Read more about Cordaid’s Healthcare program. Or about Cordaid’s activities in Ethiopia.