We shouldn't count chickens before they hatch: results-based financing and the challenges of cost-effectiveness analysis. Issue 3 (27th May 2021) - Paul, Elisabeth
ABSTRACT: Results-based financing (RBF) is subject to fierce debate and the evidence-base on its cost effectiveness is scarce. To our knowledge, only one cost-effectiveness study of RBF in a lower-middle income country has been published in a peer reviewed journal. That study – in Zambia – concludes that RBF is cost-effective, which was then uncritically repeated in an editorial accompanying its release. Here we would like to warn against readily accepting the conclusion of the cost-effectiveness study of RBF in Zambia, because its conclusions are not straightforward and could be dangerously misleading, especially for those readers unfamiliar with health economics. After outlining the results from the Zambia's RBF cost-effectiveness study, we point to important methodological issues related to cost-effectiveness analysis, showing how key assumptions produce particular results. We then reflect on how cost-effectiveness is different from efficiency and affordability – which is important, since cost-effectiveness studies often have considerable influence on national health financing strategies and policy priorities. Finally, we provide an alternative reading of the evidence on RBF in Zambia. Namely, when examined from an efficiency point of view, the study actually demonstrates that RBF is less efficient than the simpler alternative of providing more resources to health facilities, unconditioned on performance, which will be of most interest to a government with tight budget constraints. As a result, existing claims that RBF is cost-effective are overstated, requiring further and more nuanced examination with more adequate research methods.