Results-Based Financing: Testing an Innovative Outcome-Focused Approach

In March 2023, Living Goods completed a 2.5- year Results Based Financing (RBF) project in Uganda in partnership with Instiglio, Innovations for Poverty Action and Global Development Incubator. Living Goods’ obsession with performance prompted us to test this as a mechanism for scaling cost-effective impactful community health.

Building on a successful 2018 pilot, this RBF model was refined in an attempt to further influence metric-specific performance, embed quality and test scaling the approach to 1,165 CHWs in six districts.

Funding was based on the verification of quality care provided by CHWs. The data collected by CHWs through Living Goods’ Smart Health app was independently verified on a bi-weekly basis to assess performance payments earned from USAID DIV and Deerfield Foundation.

This project, launched six months into the COVID-19 pandemic, helped optimize Living Goods’ performance during a time of extreme uncertainty. Insights gleaned from the RBF’s robust data verification process helped inform our ongoing adaptation to the COVID-19 environment, ensuring CHWs could safely and effectively provide critical care to their communities.

In one of the RBF project sites: A CHW sensitizes a woman about how to keep a healthy pregnancy.

For example, early in the project, a high error rate was observed on completed sick child referrals. Upon follow-up, it was discovered that this was because a component of the COVID-adjusted CHW protocol in the Smart Health app had not been updated. This was immediately flagged for action.

Despite these benefits, implementing this complex RBF model in a community health context posed significant challenges. This is because CHWs operate in ever-changing environments with unique external limitations.

For instance, poor internet connectivity complicated bi-weekly data syncing. The frequency of the verification cycle also caused some interviews with community members to occur nearly a month after the CHW’s visit, which made recalling specific details difficult when being questioned in the verification process.

Further, because this RBF model required quality metrics to include quantity qualification, many visits that had in fact taken place remained unverified. Although this model contributed to improving several components of Living Goods’ organizational operations and demonstrated good performance among CHWs in the project area, overall, it showed no impact on the reach and quality of care they provided compared to the CHWs in the non-project areas.

Potential reasons for this include the influence of COVID-19, the fact that Living Goods-supported CHWs are already high performers and that many of the performance improvements identified in this project were implemented across all Living Goods districts, thereby affecting more than just the RBF branches.

These learnings ultimately show that complex RBF approaches may prove impactful in contexts like health facilities, where most environmental variables for providing care are known and constant.

In community health contexts, meanwhile, RBF can be impactful and cost-effective but needs to be simplified to fit the environment in which it is applied to avoid discounting payment based on external, uncontrollable factors.

To learn more about this RBF project and our learnings, you can access the final report here.

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