Although pay-for-performance (P4P) schemes have been implemented across low and middle-income countries (LMICs), little is known about their distributional consequences. A key concern is that, in case there is a Matthew Effect and financial bonuses are primarily captured by providers who are already better able to perform (say those in wealthier areas), P4P could exacerbate existing inequalities within the health system. We examine inequalities in the distribution of pay-outs in Zimbabwe’s national P4P scheme (2014-2016) using quantitative data on bonus payments and facility characteristics and findings from a thematic policy review and 28 semi-structured interviews with stakeholders at all system levels. We found that in Zimbabwe, facilities with better baseline access to guidelines, more staff, higher consultation volumes and wealthier and less remote target populations earned significantly higher P4P bonuses throughout the programme. For instance, facilities that were one standard-deviation above the mean in terms of access to guidelines, earned 90 USD more per quarter than those that were one-standard deviation below the mean. Differences in bonus pay-outs for facilities that were one standard-deviation above and below the mean in terms of number of staff and consultation volumes are even more pronounced at 348 USD and 445 USD per quarter. Similarly, facilities with villages in the poorest wealth quintile in their vicinity earned less than all others – and 752 USD less per quarter than those in the richest quintile. Qualitative data confirm these findings. Respondents identified facilities’ baseline structural quality, leadership, catchment population size and remoteness as affecting performance in the scheme. Unequal distribution of P4P pay-outs was identified as having negative consequences on staff retention, absenteeism and motivation. Based on our findings and previous work, we provide some guidance to policymakers on how to design more equitable P4P schemes.
Keywords: Health financing, pay-for-performance, inequality, Zimbabwe