Performance-based financing (PBF), often referred to as pay-for-performance (P4P) or results-based financing (RBF), refers to payment to a government, organization, or individual conditioned on taking measurable actions toward or achieving desired goals. With support from a range of donors, including The U.S. Agency for International Development (USAID), many low- and middle-income countries have used PBF in an effort to improve the quality, availability, and uptake of health services. Examples of PBF mechanisms are shown in Table 1.

Table 1. Select PBF Mechanisms

PBF has been applied to primary healthcare and specific maternal and child health, malaria, HIV, TB, and family planning services in many low- and middle-income countries. In the context of health and family planning in low- and middle-income countries, PBF typically refers to supply-side incentives

where payment to a health facility team is dependent on the quantity, quality, or efficiency of service delivery.

Despite widespread application and promising examples, evidence of the impact of PBF is mixed. PBF involves significant costs to verify achievement of performance indicators. Further, most PBF schemes have been externally funded, and there is a lack of evidence on how PBF schemes can be successfully integrated into domestic financing for long-term sustainability. PBF programs are continuously evolving and incorporating lessons learned in terms of effectiveness and efficiency of different approaches across health elements and health systems.

Why Is PBF Important for Family Planning?

PBF schemes present an opportunity to incentivize improved quality and access to family planning services. PBF schemes can specifically incentivize facility- or community-based providers to meet family planning service delivery and performance objectives. They can also facilitate improved support for quality family planning services at the district and supervisory levels. For example, financial incentives may encourage providers to offer family planning counseling, ensure the consistent availability of commodities, or offer a wider range of method choices to clients. They do not, however, cover the cost of services. Rather, PBF purchases service quantity and quality improvement, not the services themselves.

While family planning has long been included in PBF schemes, performance-based family planning financing raises the same concerns as discussed above. It is particularly important with family planning, however, to insure that PBF supports free and informed choice. For example, PBF initiatives should carefully consider incentive levels for family planning indicators in order to encourage counseling and provision of a broad range of family planning methods. PBF initiatives that include family planning components should also make efforts to monitor family planning provision to ensure quality standards are being met for clinical care as well as for client voluntarism and informed choice, and that validation approaches respect privacy and confidentiality.

The evidence on the impact of PBF on family planning varies. A 2014 review of 28 community-based family planning programs incorporating PBF found that only some had positive impact. However, there are examples of success. PBF initiatives in Nigeria and Zambia have showed positive results in family planning consultation and modern contraceptive use. Rwanda’s PBF program, implemented by the Ministry of Health beginning in 2005, includes family planning, and studies suggest it has increased use of family planning services and improved quality.