Effect of performance-based financing on health service delivery: a case study from Adamawa state, Nigeria

The Nigeria State Health Investment Project (NSHIP) was implemented in three Nigerian states between 2013 and 2018. Under the NSHIP, some local government areas were randomly assigned to Performance-Based Financing (PBF) intervention while others received decentralized facility financing (DFF) for comparison. This article evaluates the effect of PBF compared with DFF on health service delivery indicators in Adamawa state, under this quasi-experimental design, using the difference-in-differences technique. The analysis used health facility monthly data collected by the Health Management Information System through the District Health Information Software 2 (DHIS2). The PBF intervention group significantly increased the quantity of most of its service delivery indicators, such as antenatal care visits and deliveries by skilled personnel compared with the comparison group (DFF) after the introduction of NSHIP, although the baseline level of service delivery between PBF and DFF health facilities was statistically identical prior to the introduction of the intervention. We also conducted robustness check analysis to confirm the effect of PBF. Overall, we found a significant positive effect of PBF on most service delivery outcomes, except full vaccinations and post-natal care. One important policy implication is that we should carefully use PBF for targeted indicators.