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USAID launched a project in 1995 to deliver basic health services in Haiti, a country ravaged by violence, poverty, and a lack of political leadership. The project began by reimbursing NGOs for their expenditures, but evolved to include payments based partly on attaining performance targets. The result: marked improvements in health in the six years since payment for performance was phased in, particularly in immunization coverage and attended deliveries. Results for prenatal and postnatal care were less significant, perhaps suggesting a strong patient behavioral element not under the influence of provider actions.
Results also suggest that performance-based payments helped to improve the behavior of managers and service providers; they were observed to be more proactive, innovative and focused on being more accountable for results. This in turn led to more effective use of data for decision making; the strategic use of technical assistance; improvements in management, training, decentralization, delegation and supervision; strengthened financial management; and increased cost effectiveness. All of these changes will contribute to the likelihood of the long-term viability of the service providing organizations. This paper is one in a series of four CGD working papers written in conjunction with the Performance-Based Incentives Working Group (Working Paper Nos. 119 – 122).