ArticleBMC health services research2024
Can performance-based financing improve efficiency of health centers in Ethiopia? A Malmquist Productivity Index analysis.
Article in BMC health services research, 2024. The graph could read no effect estimate from its abstract, so it casts no vote on the map. Cited by 1 paper.
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1 citing paper in PubMed.
- Prospective payment system transformation (2000-2024): temporal trends, payment architecture, and cross-national variation.Health economics review · 2026Review
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3 authors.
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Abstract
introductionThe Ethiopian government has introduced several healthcare financing reforms intending to improve efficiency. Piloting implementation of performance-based financing is one of these actions. The purpose of this research is to assess the efficiency of healthcare facilities that have implemented performance-based financing compared to those that have not.
methodsEfficiency was measured using a nonparametric data envelopment analysis and the Malmquist Productivity Index technique. Total factor productivity change, technical change, and technological change are compared across eight sampled healthcare facilities that are implementing performance-based financing and eight that are not in Ethiopia.
resultsHealth facilities implementing performance-based financing have a mean technical efficiency score of 64%, allowing for a potential 36% reduction in inputs without affecting outputs. Their scale efficiency is 88%, indicating a potential 12% increase in total outputs without expanding facilities. In contrast, facilities not implementing performance-based financing have a mean technical efficiency score of 62%, with a potential for 38% input reduction without affecting outputs. Their scale efficiency is 87%, suggesting a potential 13% increase in total outputs without scaling up facilities. Among the 16 healthcare facilities observed, seven experienced a decline in the mean total productivity, while one remained stagnant. The remaining eight facilities witnessed an increase in productivity. The healthcare facilities implementing performance-based financing showed a 1.3% decrease in mean total productivity during the observed period. Among them, five showed an increase and three showed a decrease in the total factor of productivity. The mean total factor of productivity of all healthcare facilities not implementing performance-based financing remained stagnant over the three-year period (2019-2021), with four showing an increase and four showing a decrease in total productivity.
conclusionsThe study concludes that implementing performance-based financing did not improve productivity levels among healthcare facilities over three years. In fact, productivity decreased among the facilities implementing performance-based financing, while those not implementing it remained stagnant. This shows health facilities that implement performance-based financing tend to utilize more resources for similar outputs, contradicting the anticipated efficiency improvement.
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