Effects of incentive framing on performance and effort: evidence from a medically framed experiment

We study the effects on performance of incentives framed as gains or losses, as well as the effort channels through which individuals increase performance. We also explore potential spill-over effects on a non-incentivised activity. Subjects participated in a medically framed real-effort task under one of the three contracts, varying the type of performance incentive received: (1) no incentive; (2) incentive framed as a gain; or (3) incentive framed as a loss. We find that performance improved similarly with incentives framed as losses or gains. However, individuals increase performance differently under the two frames: potential losses increase participants’ performance through a greater attention (fewer mistakes), while bonuses increase the time spent on the rewarded activity. There is no spill-over effect, either negative or positive, on the non-incentivised activity. We discuss the meaning and implications of our results for the design of performance contracts

Overtreatment and benevolent provider moral hazard: evidence from South African doctors

Overtreatment is widespread in health, with potentially dire consequences for patients, health systems and public health. It may be fueled by providers when they do not bear the cost of treatment (moral hazard), even they do not profit financially from it (i.e. benevolent providers). We test this hypothesis by creating an exogeneous change in the incentives faced by private doctors in South Africa. We find that provider moral hazard has no effect on overtreatment in volume but fuels overtreatment in cost. By contrast, when they bear the marginal treatment cost, doctors choose cheaper drug. While these results suggest that provider moral hazard contributes to overtreatment in primary care, we consider other plausible channels, such as responses to a perceived demand for high-quality drugs or market segmentation. We discuss the potential scope for supply-side cost-sharing incentives to reduce inefficiency in future health system reforms in South Africa

Physicians’ responses to financial and social incentives: a medically framed real effort experiment

Because compensation policies have critical implications for the provision of health care, and evidence of their effects is limited and difficult to study in the real world, laboratory experiments may be a valuable methodology to study the behavioural responses of health care providers. With this experiment undertaken in 2013, we add to this new literature by designing a new medically framed real effort task to test the effects of different remuneration schemes in a multi-tasking context. We assess the impact of different incentives on the quantity (productivity) and quality of outputs of 132 participants. We also test whether the existence of benefits to patients influences effort. The results show that salary produces the lowest quantity of output, and fee-for-service the highest productivity. By contrast, we find that the highest quality is achieved when participants are paid by salary, followed by capitation. We also find a lot of heterogeneity in behaviour, with intrinsically motivated individuals hardly sensitive to financial incentives. Finally, we find that when work quality benefits patients directly, subjects improve the quality of their output, while maintaining the same levels of productivity. This paper adds to a nascent literature by providing a new approach to studying remuneration schemes and modelling the medical decision making environment

Does high workload reduce the quality of healthcare? Evidence from rural Senegal

There is a widely held perception that staff shortages in low and middle-income countries (LMICs) lead to excessive workloads, which in turn worsen the quality of healthcare. Yet there is little evidence supporting these claims. We use data from standardised patient visits in Senegal and determine the effect of workload on the quality of primary care by exploiting quasi-random variation in workload. We find that despite a lack of staff, average levels of workload are low. Even at times when workload is high, there is no evidence that provider effort or quality of care are significantly reduced. Our data indicate that providers operate below their production possibility frontier and have sufficient capacity to attend more patients without compromising quality. This contradicts the prevailing discourse that staff shortages are a key reason for poor quality primary care in LMICs and suggests that the origins likely lie elsewhere

Health service availability and health seeking behaviour in resource poor settings: evidence from Mozambique.

Low-income countries are plagued by a high burden of preventable and curable disease as well as unmet need for healthcare, but detailed microeconomic evidence on the relationship between supply-side factors and service use is limited. Causality has rarely been assessed due to the challenges posed by the endogeneity of health service supply.In this study, using data from Mozambique, we investigate the effect of healthcare service availability, measured as the type of health facilities and their level of staffing and equipment, on the individual decision to seek care. We apply an instrumental variable approach to test for causality in the effect of staff and equipment availability on the decision to seek care and we explore heterogeneous effects based on the distance of households to the closest health facility.We find that living in the proximity of a health facility increases the probability of seeking care. A greater availability of referral health services in the locality has no significant effect on decision to seek care, while greater availability of staff and equipment increases the probability of seeking care when ill. Demand side barriers to health care use exist, but have a smaller impact when health care services are available within one hour walking distance

The efficiency of the local health systems: investigating the roles of health administrations and health care providers

The analysis of efficiency in health care has largely focused either on individual health care providers, or on sub-national health systems conceived as a unique decision-making unit. However, in hierarchically organized national health services, two separate entities are responsible for turning financial resources into services at the local level: health administrations and health care providers. Their separate roles and the one of health administrations in particular have not been explicitly considered in efficiency analysis. We applied stochastic frontier analysis to district-level panel data from Mozambique (2008-2011) to assess district efficiency in delivering outpatient care. We first assessed the efficiency of the whole district considered as an individual decision-making unit, and then we assessed separately the efficiency of health administrations and health care providers within the same district. We found that on average only 73% of the outpatient consultations deliverable using available inputs were realized, with large differences in performance across districts. Individual districts performed differently in administrative or health care delivery functions. On average, a reduction of administrative inefficiency by 10 percentage points, for a given expenditure would increase by 0.2% the volume of services delivered per thousand population per year. Identifying and targeting the specific drivers of administrative inefficiencies can contribute to increase service

The long-term effects of free care on birth outcomes: evidence from a national policy reform in Zambia

As women in many countries still fail to give birth in facilities due to financial barriers, many see the abolition of user fees as a key step on the path towards universal coverage. We exploited the staggered removal of user charges in Zambia from 2006 to estimate the effect of user fee removal up to five years after the policy change. We used data from the birth histories of two nationally representative Demographic and Health Surveys to implement a difference-in-differences analysis and identify the causal impact of removing user charges on institutional and assisted deliveries, caesarean sections and neonatal deaths. We also explored heterogeneous effects of the policy. Removing fees had little effect in the short term but large positive effects appeared about two years after the policy change. Institutional deliveries in treated areas increased by 10 and 15 percentage points in peri-urban and rural districts respectively (corresponding to a 25 and 35 percent change), driven entirely by a reduction in home births. However, there was no evidence that the reform changed the behaviours of women with lower education, the proportion of caesarean sections or reduced neonatal mortality. Institutional deliveries increased where care quality was high, but not where it was low. While abolishing user charges may reduce financial hardship from healthcare payments, it does not necessarily improve equitable access to care or health outcomes. Shifting away from user fees is a necessary but insufficient step towards universal health coverage, and concurrent reforms are needed to target vulnerable populations and improve quality of care

Motivating provision of high quality care: It is not all about the money

The inclusion of universal health coverage as a target in the sustainable development goal for health has boosted the global movement to improve access to healthcare services. To improve health, the services accessed must be high quality,1 yet there is mounting evidence that the quality of care delivered to populations in many low and middle income countries is inadequate.2345 Governments must consider strategies that will not only improve accessibility to care for their populations but also substantially improve quality. A priority in achieving universal health coverage is the recruitment, training, and retention of healthcare workers. However, there is widespread concern that health systems are not getting the most out of their workforce. Recent evidence shows that the quality of care provided by healthcare workers is often lower than what they are able to demonstrate in the context of a test2 or under the watchful eyes of an observer.6 The existence of such “know-do” gaps shows that substandard care cannot be fully explained by low competence or inadequate training. Low quality of care and medical errors occur more often when providers are demotivated, which can be fuelled by inadequate working conditions such as shortages of basic drugs and equipment or staff.789 Yet, although good working conditions are an important part of delivering good quality of care, they are not sufficient to ensure that health professionals are motivated and adhere to recommended treatment guidelines.1011 Here, we discuss the evidence on different approaches that can be used to increase provider motivation and ultimately improve quality of care

How effective and fair is user fee removal? Evidence from Zambia using a pooled synthetic control

Despite its high political interest, the impact of removing user charges for health care in low-income settings remains a debatable issue. We try to clear up this contentious issue by estimating the short-term effects of a policy change that occurred in 2006 in Zambia, when 54 of 72 districts removed fees. We use a pooled synthetic control method in order to estimate the causal impact of the policy on health care use, the provider chosen, and out-of-pocket medical expenses. We find no evidence that user fee removal increased health care utilisation, even among the poorest group. However, we find that the policy is likely to have led to a substitution away from the private sector for those using care and that it virtually eliminated medical expenditures, thereby providing financial protection to service users. We estimate that the policy was equivalent to a transfer of US$3.2 per health visit for the 50$1.1 for the 50% poorest

Measuring inequalities in the distribution of the Fiji health workforce

Background: Despite the centrality of health personnel to the health of the population, the planning, production and management of human resources for health remains underdeveloped in many low- and middle-income countries (LMICs). In addition to the general shortage of health workers, there are significant inequalities in the distribution of health workers within LMICs. This is especially true for countries like Fiji, which face major challenges in distributing its health workforce across many inhabited islands. Methods: In this study, we describe and measure health worker distributional inequalities in Fiji, using data from the 2007 Population Census, and Ministry of Health records of crude death rates and health workforce personnel. We adopt methods from the economics literature including the Lorenz Curve/Gini Coefficient and Theil Index to measure the extent and drivers of inequality in the distribution of health workers at the sub-national level in Fiji for three categories of health workers: doctors, nurses, and all health workers (doctors, nurses, dentists and health support staff). Population size and crude death rates are used as proxies for health care needs. Results: There are greater inequalities in the densities of health workers at the provincial level, compared to the divisional level in Fiji – six of the 15 provinces fall short of the recommended threshold of 2.3 health workers per 1,000 people. The estimated decile ratios, Gini co-efficient and Thiel index point to inequalities at the provincial level in Fiji, mainly with respect to the distribution of doctors; however these inequalities are relatively small. Conclusion: While populations with lower mortality tend to have a slightly greater share of health workers, the overall distribution of health workers on the basis of need is more equitable in Fiji than for many other LMICs. The overall shortage of health workers could be addressed by creating new cadres of health workers; employing increasing numbers of foreign doctors, including specialists; and increasing funding for health worker training, as already demonstrated by the Fiji government. Close monitoring of the equitable distribution of additional health workers in the future is critical