Payment Incentives for Improved Quality of Health Service Delivery in Republika Srpska and the Federation of Bosnia and Herzegovina

: This report outlines a strategic approach to introduce pay-for-performance (P4P) incentives for improved noncommunicable disease (NCD) care in Republika Srpska (RS) and the Federation of Bosnia and Herzegovina (FBiH). Developed under the Health Systems Improvement Project (HSIP) and Multi-Donor Trust Fund (MDTF) for Health Systems Reform, the approach focuses on evidence-based, technically sound, and politically feasible strategies. Participatorily developed, the report synthesizes global lessons and analyzes the policy environment in RS and FBiH. It proposes key design features, addressing strategic opportunities and operational challenges. Behavioral economics insights and political economy factors inform the approach, identifying key levers, opportunities, and challenges affecting P4P implementation capacity. To enhance NCD care quality, the report recommends changes in the provider payment mix, tailored reforms at entity and cantonal levels, and active service user engagement. Emphasizing the importance of linking payment incentives to performance, the proposed design spans dimensions such as performance measures, basis of payment, payment attributes, recipient of payment, and targeted outcomes. An enabling environment is deemed critical. Relatedly, effective implementation requires robust data systems, stakeholder engagement, adapted legal frameworks, and suitable institutional arrangements. Technical assistance and budgetary support needs are identified. It is expected that P4P implementation will enhance NCD care coverage and quality, thereby improving health outcomes and overall health system performance in RS and FBiH.