This is a joint post with Kate McQueston.
Argentina is a highly decentralized federal country, where more than 70% of public spending on health happens sub-nationally by independent provincial governments. Since budgetary transfers between levels of government have no conditions attached, the federal government has often struggled to influence the efficiency and impact of provincial government spending. This is a common challenge around the world, particularly in countries like China and Nigeria where most spending is decentralized.
To address this challenge, Argentina designed and implemented an innovative results-based financing program between its federal and provincial authorities called Plan Nacer, launched in 2004. Here’s how it works: The program uses small financial incentives –equivalent to less than 1% of total provincial spending on health- to reward those provinces that enroll poor, uninsured women and children in the program and improve related health outcomes. The federal program pays provinces 60% based on the number of people enrolled in the program. The remaining 40% is disbursed based on improvements in health coverage and outcomes, measured using audited administrative data. The funds go to provincial health authorities, which pass on payments to public sector health facilities to use the money however they see fit.
Now, after almost a decade of implementation, the program’s preliminary evaluation results show that these modest incentives have had an impact. The quasi-experimental evaluation shows that coverage of health services have increased (such as vaccines, health checkups for children, and counseling on reproductive health) and waiting lists for health services have decreased. The evaluation also reports a large and significant impact on neonatal mortality via prevention of low birth weight and better care for low birth weight babies. Program implementers attribute their success not only to the money, but also the measurement and the culture of measurement, feedback and accountability that grew up around the program.
Earlier this month, CGD welcomed the program’s implementers (José Prieque of Unidad de Financiamiento Internacional de Salud and Martín Sabignoso of SUMAR), evaluators (including Paul Gertler of UC Berkeley) and funders (Keith Hansen of the World Bank) to present and discuss these results. Check out the presentations from the event here, and a video of the event here (and learn more about the World Bank’s Health Results Innovation Trust Fund here).
These results provide important insight into how small incentives can enhance health outcomes and with hope will serve as a model for the scale up of similar programs in other countries with decentralized health systems.
CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise.
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