The United Nations Millennium Development Goals are approaching their deadline of 2015 but progress to date has been insufficient. Public expenditure on health – both domestic and official development assistance – have increased over the past few years in most low-income countries but results have been slow. As the public health system remains the backbone of national health policy and the main beneficiary of international aid, it is most likely part of the problem. In too many countries, the public health system does not meet user needs and demands. It is inefficient due to resource leakage and worker absenteeism. Equity, in terms of utilization and contribution, is unsatisfactory and public spending often benefits richer groups disproportionately. Ministries of health and their international advocates often cite insufficient funding as the underlying cause of low performance. Others argue that it also stems from a lack of accountability within public health systems. Although many observers and users likely share this view, few proposals for reform have been put forward. Our opinion is that performance-based financing, as it is being developed in several sub-Saharan African countries, is a strategy that could help address the structural problems plaguing health systems.

Performance-based financing can be defined as a mechanism by which health providers are, at least partially, funded on the basis on their performance. Performancebased financing can be contrasted with the line-item approach, which finances a health facility through the provision of inputs (e.g. drugs, personnel). Haiti is the first lowincome country in which health service providers (national nongovernmental organizations) were contracted and remunerated according to their performance (which was measured by the attainment of some coverage rates). In Cambodia, performancebased financing was applied to the public sector. However, despite promising results, it did not materialize into a national policy. This breakthrough did, however, take place in Rwanda. Several pilots initiated in 2002 allowed for a better understanding of major issues, then the country rapidly adopted performance-based financing as its national policy and scaled up the approach to the entire country in 2005.

The Rwandan experience has attracted a lot of attention. It has rapidly inspired neighbouring countries like Burundi and the Democratic Republic of the Congo and has consolidated an interest in performance-based financing at regional and global level. Today, more than 20 countries are in the process of introducing or scaling up performance-based financing in Africa. Performance-based financing also fits into the Millennium Development Goals aid paradigm and global efforts for rapid progress on a few key indicators. Yet several authors have expressed concerns about this wave of enthusiasm. Our assessment is, however, that their critique reflects a view of performance-based financing as solely a provider payment mechanism and overlooks the potential of performance-based financing to reform health systems. These critiques can't see the forest for the trees.

Related article/s:

• Efficiency and effectiveness of public expenditure in Uganda: Evidence from a public expenditure tracking study in the health sector