Center for Health Market Innovations (CHMI)

Pilot: Performance-based payment:

Beginning in 1999, 3 NGOs participated in a pilot to change the payment system from expenditure reimbursements to performance-based payments. Under the new system, 95% of the established budget would remain subject to the expenditure-based reimbursements. Additionally, they had a possibility to earn a bonus equivalent to 10% of their budget based on attainment of pre-determined performance targets. Five of the targets dealt with improving health indicators, one related to decreasing waiting time and thus increasing patient satisfaction, and one was tied to improving coordination with the Ministry of Health. To facilitate the meeting of these targets, the project provided technical assistance to participating NGOs. At the conclusion of the pilot, all three NGOs received a bonus exceeding the amount of funding they would have obtained for the remaining 5% of the budget under the expenditure reimbursement system, though none received the full bonus. NGOs reacted positively to the system, reporting that their staff paid extra attention to the organization's objectives and developed innovative new ways of meeting those objectives. This included putting greater emphasis on efforts to involve the communities in reaching health goals.