The Ethiopian government’s recent healthcare financing reform, which piloted performance-based financing (PBF) in health facilities, aimed to improve efficiency. However, new research reveals that PBF has not achieved the expected productivity gains.
Key Findings:
- Technical Efficiency: PBF facilities had a mean technical efficiency score of 64%, suggesting a potential 36% input reduction without affecting outputs. Non-PBF facilities scored 62%.
- Scale Efficiency: PBF facilities showed an 88% scale efficiency, indicating a potential 12% output increase without expansion. Non-PBF facilities had an 87% scale efficiency.
- Productivity: PBF facilities experienced a 1.3% decrease in mean total productivity over three years, while non-PBF facilities remained stagnant.
Conclusion:
The study concludes that PBF did not improve productivity in Ethiopian healthcare facilities, with those implementing PBF utilizing more resources for similar outputs. This finding calls for a reassessment of PBF strategies to ensure they enhance healthcare delivery effectively.