Evaluating the Comparative Effectiveness of Performance-Based Financing and Direct Facility Funding in Improving Maternal and Child Health Service Utilization in Nigeria.

Abstract

Nigeria continues to face one of the highest maternal mortality burdens globally, a situation that is closely linked to the low utilization of essential maternal and child health services. To address this challenge, the Nigeria State Health Investment Project (NSHIP) introduced two innovative financing mechanisms Performance-Based Financing (PBF) and Decentralized Facility Financing (DFF) aimed at improving the performance of primary healthcare facilities. This study compared the effectiveness of these financing approaches in enhancing service utilization while accounting for the selection bias commonly associated with non-experimental research designs. The study adopted a retrospective quantitative approach and analyzed data from 216 Primary Health Care (PHC) facilities located in Adamawa, Nasarawa, and Ondo States between 2022 and 2025. Propensity Score Matching (PSM) was used to create comparable groups of facilities based on important characteristics such as staffing levels and bed capacity. Thereafter, Analysis of Covariance (ANCOVA) and Welch’s ANOVA were employed to examine differences in service utilization across key maternal and child health indicators, including Outpatient Department (OPD) attendance, Antenatal Care (ANC) visits, Skilled Deliveries, Family Planning (FP) uptake, and Complete Vaccination Coverage (CVC). The results revealed that facilities operating under the PBF model consistently recorded higher utilization rates than those supported through DFF in several critical service areas. Specifically, PBF facilities achieved significantly better outcomes in OPD attendance (Mean Difference = 3,276; p < .01; Partial Eta Squared = 0.19), Skilled Deliveries (Mean Difference = 322; p < .001; Partial Eta Squared = 0.34), and Family Planning uptake (Mean Difference = 1,180; p < .001; Partial Eta Squared = 0.36). These findings indicate that PBF had a substantial positive influence on services that require active provider engagement and community mobilization. In contrast, no statistically significant difference was found between PBF and DFF in Complete Vaccination Coverage (p = .70), suggesting that both financing approaches were equally effective in supporting routine immunization services. The study concludes that PBF offers a clear advantage for demand-driven maternal and reproductive health services, whereas DFF provides comparable results for supply-driven programmes such as routine immunization. These findings highlight the importance of adopting a differentiated financing strategy within Nigeria’s primary healthcare system. Rather than relying on a single financing model, policymakers should consider a hybrid approach that combines the strengths of both PBF and DFF to maximize health outcomes while ensuring efficient use of available resources. However, as this study focused solely on service volumes, future research is recommended to evaluate the impact of these financing models on clinical quality of care, maternal mortality outcomes, and cost-effectiveness across broader geographic settings.