​

The Use of Pay for Performance Contracts with NGOs in Afghanistan:

 

In many contexts, including fragile settings like Afghanistan, the coverage of basic health services remains low. To address these challenges there has been considerable interest in contracting with NGOs and examining the effect of financial incentives on performance. The Government of Afghanistan and its partners have used contracting with NGOs for more than 20 years to deliver a basic package of health services (BPHS) focused on primary health care (PHC). Using contracts allowed the Government to focus on its stewardship role and helped it critically monitor and evaluate NGO performance. While the NGO contracts worked well, there was concern in 2017 and 2018 that service delivery had stagnated. To address this challenge, the Government, in 2019, introduced a pay-for-performance (P4P) approach into the contracts.

 

The P4P aspect of the contracts paid the NGOs a fixed “tariff” for each of 10 critical BPHS services such as skilled birth attendance, outpatient visits for children, etc. The number of services claimed by the NGO contractors through the health management information system (HMIS) were independently verified. For example, if an NGO claimed 1,000 institutional deliveries in 6 months, the tariff per delivery was $20, and the third-party was able to verify 90% of the deliveries in the health facilities they visited, then the NGO would receive $18,000 (1,000 x $20 x 90%). In addition to the P4P payments, NGOs were provided a lump-sum payment to cover their overheads and other services not compensated by the P4P mechanism. The amount of the lump sum was determined through a competitive tendering process and averaged 40.2% of the total contract value, which average $4.50 per capita per year. NGOs were selected through a competitive process in which both technical quality of the proposal and the bid price (“lump sum”). The NGOs bid on “packages” which comprised one whole province.

 

The effectiveness of P4P contracts was assessed using an interrupted time series analysis relied on independently verified HMIS data from 2015–2021, i.e., before and after the introduction of P4P. Annual health facility surveys were used to assess the quality of care. (More details of the evaluation are available at Samad D et al. BMC Health Services Research (2023) 23:122) The introduction of P4P into NGO contracts increased the quantity of the ten compensated service delivery outcomes by a median of 22.1 percentage points (range 10.2 to 43.8) There was a small decrease in quality of care initially, but it was short-lived, and no other unintended consequences were found. P4P contracts with NGOs led to a substantial improvement in service delivery at lower cost despite a very difficult security situation. The promising results from this large-scale experience warrant more extensive application of P4P contracts in other fragile settings or wherever health service coverage remains low.

​