| Resource poor countries, particularly in sub-Saharan Africa, face many challenges improving maternal health due to financial and human capital constraints, lack of motivation among health providers and lack of physical resources. One of the key policies implemented in Rwanda in response to these issues is Performance Based Financing (PBF). PBF provides bonus payments to providers for improvements in performance measured by indicators of specific types of utilization (e.g. prenatal care) and quality of care. While the approach promises to improve health system performance, there is little rigorous evidence of its effectiveness, especially in low-income settings.;This study examines the impact of the incentives in the Rwandan PBF scheme on prenatal care utilization, the structure and process quality of prenatal care, institutional delivery, and modern contraceptive use. The analysis uses data produced from a prospective quasi-experimental design nested within the program's rollout. The rollout was implemented in two phases: in 2006, 86 facilities (treatments) in rural areas enrolled in the PBF, and another 79 facilities (control) enrolled two years later. In order to isolate the incentive effect from the resource effects, the control facilities were compensated by increasing their traditional budgets with an amount equal to the average PBF payments to the treatment facilities. Baseline and endline data were collected from all of the facilities and a random sample of 14 households in each facility's catchment area.;Using a different approach, PBF had a large and significant impact on the quality of prenatal care measured by process indicators of the clinical content of care and deliveries in facilities. However, no such effect was found on prenatal care visits or on the use of modern contraceptives.;The results provide evidence to support the hypothesis that financial performance incentives can improve both the use and quality of maternal health services. Policy recommendations include increasing incentive for prenatal care service, complementary training to increase quality and combining PBF with a demand-side intervention such as conditional cash transfer involving community health workers. |
