54275 SEPTEMBER 2009 The Puzzle of Isolation Bonuses for Health Workers BY CARYN BREDENKAMP HEALTH, NUTRITION, AND POPULATION UNIT In results-based financing (RBF) schemes in Sud-Kivu and Bas Congo provinces in the Demo- cratic Republic of Congo, health workers in far-flung health facilities can earn a bonus up to 20% larger than those who work in the most urban facilities. Variants of these "isolation bonuses" are also used in RBF schemes implemented in parts of Kasai Oriental, Kasai Occidental, Province Oriental, Nord Kivu and Bandundu provinces. This brief note examines what isolation bonuses are and in terms of distance from the major town, in terms of why they are used. distance from the reference hospital or other similar categorization. What are isolation bonuses? Why use an isolation bonus in an RBF The RBF schemes referred to above are of the "fee-for- scheme? service" type, meaning that the financial inducement to provide more services takes the form of an additional pay- It is not immediately obvious why isolation bonuses are used ment for each additional unit of service that is rendered. in RBF schemes. Surely, horizontal equity would require that The payment varies by service type (usually according to both urban and rural health workers have the opportunity to the priority, difficulty and financial cost of delivering the earn bonuses of equal size? Some might even argue that service) and the total bonus payment is equal to the sum one could consider paying lower maximum bonuses in rural of the services delivered multiplied by the value of each areas because the cost of living is lower. individual service. In addition, health facilities in isolated areas are sometimes Table 1: Hypothetical fee-for-service paid "isolation bonuses." These are an upward adjustment schedule for a primary health center of the bonus according to the geographic location--or degree of isolation--of a health facility. In a fee-for-service RBF scheme, this usually means that remote facilities are Service unit Price (US$) paid more than urban facilities for each service delivered. No. of new curative care consultations 1 Separate performance-related fee schedules then exist for No. of children fully immunized 1.5 different facilities. Sometimes, though, the isolation bonus involves an adjustment to only one or two indicators in No. of institutional deliveries 2.5 the fee schedule, which changes the relative weights of No. of women using a modern method 1 the indicators and, thus, changes the incentives faced by of family planning remote and urban workers to deliver particular services. No. of pregnant women with at least 4 1.5 prenatal care visits For the purposes of the payment of bonuses, "isolation" No. of at-risk pregnancies successfully 2.5 can be defined in terms of an urban-rural dichotomy, referred to the reference hospital 1 www.rbfhealth.org technical brief Table 2: Hypothetical fee-for-service schedule for a primary health center--with isolation bonuses Urban areas Rural areas Service unit price (US$) price (US$) No. of new curative care consultations 1.0 1.2 No. of children fully immunized 1.5 1.8 No. of institutional deliveries 2.5 3.0 No. of women using a modern method of family planning 1.0 1.2 No. of pregnant women with at least 4 prenatal care visits 1.5 1.8 No. of at-risk pregnancies successfully referred to the reference hospital 2.5 3.0 VeRTIcal equITy a peRFoRmance-BaSeD FoRm oF HaRDSHIp The counter-argument, also equity-related, is that remote allowance and urban health workers are not in similar starting posi- Those familiar with health worker compensation schemes tions and, thus, should be treated differently. may also see some similarities between isolation bonuses and the hardship allowances that are paid to health work- Isolation bonuses are often built into RBF schemes to ers in many countries, such as Indonesia and Zambia, to compensate for the (perceived) greater challenges that compensate for the disadvantages of working in remote remote health workers face in delivering services. Since areas. The broader policy objective of isolation bonuses in a rural population is more dispersed, and typically faces this context, then, is to attract health workers to, or retain greater physical and financial barriers to accessing care, it them in, rural or isolated areas. Structuring a hardship requires a greater effort from a remote health worker than allowance as part of a results-based financing scheme from an urban health worker to deliver a similar amount of has the added advantage (from the perspective of the services. The remote health worker, therefore, is arguably purchaser) that the hardship allowance is not an automatic deserving of larger rewards. salary supplement, but a supplement that is conditional on performing well in that environment. In other words, it pro- This line of argumentation may give rise Health workers vides the opportunity to earn more money, but does not to an isolation bonus that takes the form in remote areas of a proportional increase in the price of guarantee it unless performance improves. It is probably are arguably each indicator (similar to Table 2). alter- also a more politically palatable form of hardship allowance deserving of natively, the bonus may take the form of in environments where authorities fear that higher salaries in the health sector may induces wage inflation across larger rewards an adjustment to only specific indicators other sectors. where the issue of the remoteness of the health facility is most likely to affect performance. an example of the latter is an upward adjustment of the price To pay an isolation or not to pay an paid for the successful referral of at-risk pregnancies in an isolation bonus? RBF pilot in Katanga province in the Democratic Repub- lic of congo. Health centers that are located the furthest The decision to incorporate an isolation bonus in the away from hospitals receive a larger payment per at-risk design of RBF programs is one that all project designers pregnancy that is successfully referred to the hospital should consider. There is potential for both equity and ef- because a successful referral over that distance involves ficiency gains. However, it does add an additional level of more motivation, effort and financial cost. detail to the design and raises another set of issues around which consensus will need to be built, and the additional gains of introducing this refinement may be relatively small 2 www.rbfhealth.org technical brief compared to adjustments to other elements of an RBF program. consequently, and depending on local capacity, it may be prudent to introduce isolation bonuses only once an RBF program is up and running. at the technical level, it would not require a massive overhaul of the existing RBF design, but simply a change to the computation formula. Introducing the isolation bonus at that stage would have the added advantage that the appropriate size of the bonus could be estimated based on actual data on dif- ferences in urban and remote health worker performance under the RBF scheme. 3 www.rbfhealth.org technical brief