State Health Society, Bihar Implements Automated Payment Engine To Disburse Health Incentives

Introduction of PFMS Health Module has eliminated the repeated visits required by mothers to collect cheques and receive payments; it has made the accounting and banking reconciliation easier and hence freeing me up from some of my administrative tasks” – Dr.Krishna Kumar, Medical officer, PHC Bihta

“This time I got my JBSY incentive amount directly into my bank account. After the delivery of my baby, I gave my bank account details to ASHA and receivedmy money into my account within a month. But, at the time of my first delivery, I had to do a lot running around and received a check after two months of delivery. This time I got my money without any hassle” – Pushpa Devi, JBSY beneficiary, village- Madhupur, Bihta

In 2013, the State Health Society, Bihar (SHSB), Office of Controller General of Accounts, Ministry of Finance (Public Financial Management System – PFMS) and International Finance Corporation (IFC) initiated a Government to Person Health Payments pilot project in the state of Bihar to digitise the health incentive payments to front line health workers and beneficiaries to enhance accuracy, timeliness and transparency in the processes. The project is supported by Bill and Melinda Gates Foundation. Today, under SHSB’s leadership the project is implemented across the state digitizing the health incentive payments, having benefited over 340,000 JBSY mother beneficiaries and 75,000 ASHA workers. The following is a narrative about this successful initiative.

1. Background

Under the National Health Mission (NHM), the SHSB disburses incentive payments to various beneficiaries under different health programmes. On recommendations from SHSB, a diagnostic study conducted by IFC in 2010-2011showed that health programmes experienced significant delays ranging from two months to two years in processing incentive payments, and medical officers spend nearly 30% of their time in administering payments, the time that could be spent in providing health care services. The delays in receiving payments were impacting the motivation of health workers and beneficiaries which in turn affected the overall health outcomes expected from various programmes.

2. Creation of PFMS Health Module to deliver health payments

To address the challenges, SHSB and IFC together with PFMS designed and developed a specific module for processing health related payments called Public Financial Management System Health Module (PFMS HM).This module is fully integrated with PFMS to digitize the health incentive payments. In addition, the project assists the PFMS roll-out in Bihar, thereby contributing to the overall DBT process.

3. Objective

The objectives of the project are-

1. To streamline health incentive payments in the state of Bihar by automating the health payments and bringing in increased accuracy, transparency and efficiency in payments processing
2.  Provide analytical reports to senior management of SHSB and Govt of Bihar for better monitoring and informed decision making.
3. To bring in increased access to the bank services for the program beneficiaries.

4. Key features

1. The Health Module (HM) records the events electronically, automates the calculation, verification, and transfers payments directly into beneficiaries’ bank accounts.
2. The HM has been developed as a part of PFMS within existing PFMS software environment & infrastructure. There is a single sign-on feature which allows existing PFMS users to access PFMS HM and it leverages PFMS bank Integration to make DBT payments to beneficiaries on more than 110+ banks
3. HM automates payment calculation based on pre-configured NHM rules for each beneficiary; HM is integrated with MCTS to register and validate JSY mother beneficiaries’ records; and Aadhaar numbers can be used for registration of beneficiaries & payments (ABPS)
4. HM uses PFMS Bank Account Validation Module to verify beneficiary accounts; Payments can be made from any bank to any bank.
5. HM captures event details as per requirement for audit trail

5. Target beneficiaries

Frontline health workers such as ASHAs and Anganwadi workers and beneficiaries under various NHM programmes such as JBSY, family planning etc. are currently receiving incentive payments through the HM. After further enhancements HM can be used to process salaries of contractual employees hired at block, district and state level, and payments to various private parties who provide services to health facilities and are paid based on the agreement terms.

6. Payment details and reports that can be generated through HM

PFMS HM can provide beneficiary wise and programme wise payment details which will be useful for SHSB and Finance Department to monitor health programmes and budget utilization.

7. Pilot and Scale up:

The health module was rolled out in June 2014 in selected five pilot districts of Bihar. Based on user feedback, enhancements were made, and the revised version was launched in July 2016. 

8. Process flows

Pic: 1 - Operational Process flow:

Pic 2: System Process flow:

The various programme level event details are entered by the block users in PFMS HM. PFMS HM has inbuilt business rules and hence automatically calculates the incentive payments to be paid to different programme beneficiaries. After approval of events, a payment advice is generated and the payments are directly credited into individual bank accounts.

9. Results so far:

1. The PFMS HM is live in all 38 districts of Bihar; nearly 340 block PHCs are using the PFMS HM
2. More than 90% payment agencies of Bihar (upto village level) are registered in PFMS. Hence, Bihar ranks in the top 2^ndcategory among all states in the registration
3. Financial awareness:  The baseline study conducted in 2013 revealed that nearly 90% of women beneficiaries of health programs in Bihar did not have bank accounts.  To address this challenge, the project designed a state-wide financial awareness programme to enhance banking penetration among women beneficiaries. Trainers organized financial awareness trainings for ASHAs to empower them to become change agents who can help women beneficiaries in opening of bank accounts. The programme has imparted training to all active ASHAs, nearly 75,000, across the state.  
4. All the users across the state, about 1800 block & district officials, have been imparted training on how to use PFMS HM and more than 50% of them are using the system on a regular basis.
5. About 700,000 JSY mother beneficiaries have opened bank accounts and registered their accounts in PFMS; About 3,40,000 mothers received JBSY payments directly into bank accounts in FY 2016-17.
6. In a survey conducted by an independent evaluation agency, 75% ASHAs reported that, after HM implementation, time is saved from enquiring about the payments which is used for family and in field work. The delay in average time for FLWs to receive payments has been reduced by 35% (from 170 days to 111 days) after using PFMS HM.