Attributes of funding flows and quality of maternal health services in a mixed provider payment system: A cross‐sectional survey of 108 healthcare providers in Indonesia

Strategic purchasing of health services requires developing a coherent set of incentives across financing sources. In many countries, including Indonesia, healthcare providers engage with multiple financing sources. It is not well known how multiple funding flows in these mixed provider payment systems may interact at the facility level to influence provider behavior, quality of care, and ultimately health outcomes. Our study explored the association between facility capacity to provide high-quality maternal and newborn care at delivery and various attributes of facility funding, including funding flexibility, sufficiency of funds to cover direct costs, predictability of funds in timing and amount, and facility autonomy to make management decisions (decision space). We used survey data collected from primary and secondary maternal healthcare providers (n = 108) across eight provinces in Indonesia. We constructed a technical quality index that measures facility capacity to provide high-quality delivery care and several financing measures that summarize provider perceptions of flexibility, sufficiency, predictability of fund flows, and provider decision space. We found a statistically significant association between the decision space index score and the technical quality index score among hospitals and public primary care providers. One additional point on the decision space index was associated with an additional 0.15 (p = 0.021; 95% confidence interval: 0.024-0.275) on the quality index score after controlling for provider characteristics and geographic location. Our findings suggest that increasing facility autonomy to make management decisions may be one avenue for improving facility capacity to provide high-quality care in systems where providers deal with multiple fund flows with varying attributes. Design of strategic purchasing reforms must consider the full context in which providers operate to streamline incentives and ensure providers have the capacity to respond to those incentives appropriately.