PBF bonus as a substitute to salary increase?
Have you reduced or frozen salaries or hospital budgets while phasing in PBF?
Project Work Period
05/12 - 22/12/2017
Working Languages
English & French


Hello. My name is Rena Eichler (you can discover my profile here). I am interested in furthering understanding about the links between Performance Based Financing (PBF) and output based financing through social health insurance. PBF has potential to create the systems to pay providers based on outputs as well as quality and to change service provision culture to become more proactive and accountable. One of the challenges many (all?) countries confront when transitioning from paying salaries to paying for delivered services is that it is extremely challenging to reduce health worker salaries. It is also challenging to reduce input based budgets provided to hospitals. This may be a constraint to fully transitioning to social insurance. We also may find that a combination of salary plus performance payments works well for the long term. We may also find that partial reduction in input based budgets to health institutions combined with progressively higher amount based on outputs/results achieves the goals of reform. The political economy of financing reforms likely enter into the discussion of what is feasible. Health worker and hospital unions may threaten to strike if salaries and or institutional budgets are reduced and politicians may not be willing to pay this price.


I would like that you share with me your experience trying to either reduce or freeze (no raises) health worker salaries as part of the introduction or evolution of PBF. I am also interested in learning about examples of reducing or freezing hospital input based budgets and increasing the proportion of hospital budgets that are based on outputs. Can you share examples of countries where it has been possible to either freeze or reduce health worker salaries? or facility budgets? Can you share examples of countries where this was attempted but resistance from unions or other resistance blocked transition? Were there political challenges to be overcome such as resistance by unions? How did government leaders manage this process? What trade-offs and compromises were reached? What mistakes were made? What lessons can you share that may help other countries steer a transition to output based financing?


Any expert active in PBF can share his or her observations and reflections with us.



Human Resources for Health