The terms result-based financing and pay-for-performance (P4P) are used interchangeably. The Working Group on Performance-Based Incentives suggests the following working definition for P4P: “Transfer of money or material goods conditional on taking a measurable action or achieving a predetermined performance target.”

There are few rigorous studies of results-based financing (RBF) and overall the evidence of its effects is weak.

Conditional cash transfers and other types of economic incentives targeting healthcare recipients can increase the use of preventive services.

Financial incentives can also influence professional practice, such as increasing the delivery of immunisations or screening.

RBF is typically part of a package of interventions and it is difficult, if not impossible to disentangle the effects of RBF from other components of the intervention packages, including increased funding, technical support, training, new management structures and monitoring systems.

The flows of money required for RBF may be substantial, including the incentives themselves, administrative costs, and any additional service costs.

There is almost no evidence of the cost-effectiveness of RBF.

RBF can have unintended effects, including motivating unintended behaviours, distortions, gaming, corruption, cherry-picking, widening the resource gap between rich and poor, dependency on financial incentives, demoralisation, and bureaucratisation.

RBF can only be cost-effective if the intervention or behaviour it is intended to motivate is cost-effective and worth encouraging and there is low compliance with the desired behaviour.

Financial incentives should be designed to motivate desired behaviours based on an understanding of the underlying problem and the mechanism through which financial incentives could help.

Financial incentives are more likely to influence discrete individual behaviours in the short run and less likely to influence sustained changes.

The mechanisms through which financial incentives given to governments or organisations can improve performance are less clear.

RBF schemes should be designed carefully, including the level at which they are targeted, the choice of targets and indicators, the type and magnitude of incentives, the proportion of financing that is paid based on results, and the ancillary components of the scheme.

Stakeholders should be involved in the design of RBF.

The focus should be on addressing important health system problems in order to achieve health goals – i.e. starting with the problem, not the solution.

RBF should be used if it is an appropriate strategy to help address priority problems and goals.

For RBF to be effective technical capacity or support must be available and it must be part of an appropriate package of interventions.

RBF schemes should be monitored, among other things, for possible unintended effects, and evaluated, using as rigorous a design as possible to address important uncertainties.