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Using Performance Incentives to Improve Medical Care Productivity and Health Outcomes

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  • Gertler, Paul
  • Vermeerch, Christel

Abstract

We nested a large-scale field experiment into the national rollout of the introduction of performance pay for medical care providers in Rwanda to study the effect of incentives for health care providers. In order to identify the effect of incentives separately from higher compensation, we held constant compensation across treatment and comparison groups – a portion of the treatment group’s compensation was based on performance whereas the compensation of the comparison group was fixed. The incentives led to a 20% increase in productivity, and significant improvements in child health. We also find evidence of a strong complementarity between performance incentives and baseline provider skill.

Suggested Citation

  • Gertler, Paul & Vermeerch, Christel, 2013. "Using Performance Incentives to Improve Medical Care Productivity and Health Outcomes," Institute for Research on Labor and Employment, Working Paper Series qt9qn9q7ph, Institute of Industrial Relations, UC Berkeley.
    • Handle: RePEc:cdl:indrel:qt9qn9q7ph
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    7. Ritva Reinikka & Jakob Svensson, 2010. "Working for God? Evidence from a Change in Financing of Nonprofit Health Care Providers in Uganda," Journal of the European Economic Association, MIT Press, vol. 8(6), pages 1159-1178, December.
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    1. repec:spo:wpmain:info:hdl:2441/4pmvo3bm7m9claao2gl0337ip4 is not listed on IDEAS
    2. Elise Huillery & Juliette Seban, 2014. "Performance-Based Financing, Motivation and Final Output in the Health Sector: Experimental Evidence from the Democratic Republic of Congo," Working Papers hal-01071880, HAL.
    3. Pascaline Dupas & Edward Miguel, 2016. "Impacts and Determinants of Health Levels in Low-Income Countries," NBER Working Papers 22235, National Bureau of Economic Research, Inc.
    4. Elise Huillery & Juliette Seban, 2015. "Financial Incentives are Counterproductive in Non-Profit Sectors: Evidence from a Health Experiment," SciencePo Working papers Main hal-01164460, HAL.
    5. Tisamarie B. Sherry & Sebastian Bauhoff & Manoj Mohanan, 2017. "Multitasking and Heterogeneous Treatment Effects in Pay-for-Performance in Health Care: Evidence from Rwanda," American Journal of Health Economics, MIT Press, vol. 3(2), pages 192-226, Spring.
    6. Alaka Holla & Jishnu Das & Aakash Mohpal & Karthik Muralidharan, 2015. "Quality and Accountability in Healthcare Delivery: Audit Evidence from Primary Care Providers in India," Working Papers id:7219, eSocialSciences.
    7. Pablo A. Celhay & Paul J. Gertler & Paula Giovagnoli & Christel Vermeersch, 2019. "Long-Run Effects of Temporary Incentives on Medical Care Productivity," American Economic Journal: Applied Economics, American Economic Association, vol. 11(3), pages 92-127, July.
    8. Fabre, Anaïs & Straub, Stéphane, 2019. "The Impact of Public-Private Partnerships (PPPs) in Infrastructure, Health and Education: A Review," TSE Working Papers 19-986, Toulouse School of Economics (TSE), revised Sep 2021.
    9. Alzúa, María Laura & Katzkowicz, Noemí, 2021. "Pay for performance for prenatal care and newborn health: Evidence from a developing country," World Development, Elsevier, vol. 141(C).
    10. Manoj Mohanan & Katherine Donato & Grant Miller & Yulya Truskinovsky & Marcos Vera-Hernández, 2021. "Different Strokes for Different Folks? Experimental Evidence on the Effectiveness of Input and Output Incentive Contracts for Health Care Providers with Varying Skills," American Economic Journal: Applied Economics, American Economic Association, vol. 13(4), pages 34-69, October.
    11. repec:spo:wpecon:info:hdl:2441/4pmvo3bm7m9claao2gl0337ip4 is not listed on IDEAS
    12. Dizon-Ross, Rebecca & Dupas, Pascaline & Robinson, Jonathan, 2017. "Governance and the effectiveness of public health subsidies: Evidence from Ghana, Kenya and Uganda," Journal of Public Economics, Elsevier, vol. 156(C), pages 150-169.
    13. Gertler, Paul & Giovagnoli, Paula & Martinez, Sebastian, 2014. "Rewarding provider performance to enable a healthy start to life : evidence from Argentina's Plan Nacer," Policy Research Working Paper Series 6884, The World Bank.
    14. Friedman, Willa & Keats, Anthony & Mutua, Martin Kavao, 2022. "Disruptions to healthcare quality and early child health outcomes: Evidence from health-worker strikes in Kenya," Journal of Health Economics, Elsevier, vol. 86(C).
    15. Jishnu Das & Alaka Holla & Aakash Mohpal & Karthik Muralidharan, 2016. "Quality and Accountability in Health Care Delivery: Audit-Study Evidence from Primary Care in India," American Economic Review, American Economic Association, vol. 106(12), pages 3765-3799, December.
    16. Fichera, Eleonora & Anselmi, Laura & Gwati, Gwati & Brown, Garrett & Kovacs, Roxanne & Borghi, Josephine, 2021. "Can Results-Based Financing improve health outcomes in resource poor settings? Evidence from Zimbabwe," Social Science & Medicine, Elsevier, vol. 279(C).
    17. Elise Huillery & Juliette Seban, 2015. "Financial Incentives are Counterproductive in Non-Profit Sectors: Evidence from a Health Experiment," SciencePo Working papers hal-01164460, HAL.
    18. Adnan Q. Khan & Asim I. Khwaja & Benjamin A. Olken, 2016. "Tax Farming Redux: Experimental Evidence on Performance Pay for Tax Collectors," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(1), pages 219-271.
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    21. repec:hal:wpspec:info:hdl:2441/4pmvo3bm7m9claao2gl0337ip4 is not listed on IDEAS
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    More about this item

    Keywords

    Medicine and Health Sciences; Performance Incentives; Results-Based Financing; Pay-for-Performance; Child Health; Maternal and Child Services;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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