Understanding the experience, preferences and effects of provider payment mechanisms in Tanzania

Lead Research Organisation: Ifakara Health Institute (IHI)
Department Name: Research


Many health systems in low and middle income countries (LMICs) have are financing through multiple sources (taxes, insurance, donor support) and providers are paid through multiple methods (e.g. capitation, fee-for-service, salary). So, health providers are faced with multiple flow of funds, and each source has a different payment modality. Since providers can respond differently depending on which payment method are facing, it is important to implement a payment method that will stimulate providers' productivity to increase and minimise unintended responses. Tanzania, like other developing countries, is currently planning to harmonise the health financing sources (by introducing a single national health insurance) and use a harmonised/ unified provider payment mechanism. The harmonisation of funding sources and unified provider payment mechanisms are key steps towards universal health coverage.

In this study, therefore, I propose to better understand providers experience, responses, and preferences for provider payment mechanisms, and also identify the effect of each payment method on service quality, coverage and equity. To know how they perceive available payment methods, how they respond differently, and which attributes they prefer most. Also, to know the varied provider responses to service quality, coverage and equity. This study will also generate policy-relevant recommendation to inform the ongoing planning of designing optimal and feasible provider payment mechanisms in Tanzania. The findings might still be relevant to other settings planning to reform their provider payment mechanisms. Understanding what provider prefer most in terms of payment method attributes, will help design a payment method that can easily be acceptable among providers and response positively to improve service delivery.

The research questions will be tackled through multiple sources of data using both qualitative and quantitative data. Data will capture the perspectives and information from health providers, patients, health purchasers, and policy makers. Quantitative data will come from 120 patients exiting care from 2 districts and 240 health workers from 6 districts eliciting the preferences.

An 'action-based' dissemination workshop will be conducted to provide key stakeholders with an opportunity to reflect on the key findings, develop priorities, and plans to optimally design practice, feasible and efficient provider payment methods in Tanzania.

Technical Summary

Health care financing is largely fragmented in low and middle income countries (LMICs). Such fragmentation limits the effort to achieve the financial risk protection for universal health coverage (UHC), since fragmentation in funding sources leads to limited risk pools. To achieve the uHC, countries are advices to reforms their financing sources (harmonising finding sources), pooling mechanisms (ensure large pools for cross subsidisation), and reforms on health care purchasing (to ensure strategic health purchasing). The later reform on purchasing, reflects the need to have harmonised and effective provider payment mechanisms for incentivised intended behaviours of providers. Providers respond differently to different payment methods, of which can be in intended or unintended reaction. For example, fee-for-service may lead to over provision or unnecessary care, while capitation may be cost saving but self select to enrol only healthy patients. To design a better and optimal provider payment mechanisms, there is a need to explore the experience from providers, their preferences and associated effect of each payment method.

This type of assessment is laking in low-income settings, despite the ongoing ambitions to reach UHC. Tanzania particularly, is planning to have a single national health insurance, and design optimal provider payment mechanisms (PPMs) (e.g. output-based financing) for UHC. I therefore proposed to use mixed methods research to gather information from various respondents (provider, patients, purchasers, and policy makers) to better understand the experience of existing PPMs. The finding from this study will inform the ongoing discussion at the national level of designing optimal, feasible, and effective PPMs in Tanzania. An action-based dissemination will be conducted to generate policy relevant recommendations to improve the designing of PPM, and align well with strategic purchasing for UHC.


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