Using the Hawthorne Effect to Examine the Gap Between a Doctor's Best Possible Practice and Actual Performance

Many doctors in developing countries provide considerably lower levels of quality to their patients than they have been trained to provide. The gap between best practice and actual performance is difficult to measure for individual doctors who differ in levels of training and experience and who face very different types of patients. We exploit the Hawthorne effect—in which doctors change their behavior when a researcher comes to observe their practices—to measure the gap between best and actual performance. We analyze this gap for a sample of doctors, examining the impact of the organization for which doctors work on the performance of doctors, after controlling for their ability. We find that some organizations succeed in motivating doctors to work at levels of performance that are close to their best possible practice. This paper adds to recent evidence that motivation is at least as important to health care quality as training and knowledge.motivation, practice quality, health care, Tanzania, Hawthorne effect, Health Economics and Policy, Institutional and Behavioral Economics, International Development, I1, O1, O2,

African Traditional Healers and Outcome: Contingent Contracts in Health Care

Traditional healers are a source of health care for which Africans have always paid and even with the expansion of modern medicine healers are still popular. This paper advances the unique view that traditional healers neither possess supernatural power nor do they take advantage of their clients: they use important elements of their practice to credibly deliver unobservable medical effort and therefore high quality care. An important element of their practice has previously been ignored: traditional healers use outcome-contingent contracts to deliver unobservable medical effort. This paper presents empirical evidence that, as a result of these contracts, traditional healers are popular because they provide more unobservable medical effort than other providers from which patients can choose

"Active Patients" in Rural African Health Care: Implications for Welfare, Policy and Privatization

The 'active patient' is introduced in this paper. She is the same person as the rational peasant that we have known for at least three decades. She is a rational agent seeking health care in an environment characterized by market failures (particularly agency in the supply of medical quality) and imperfect institutional responses to these failures. We show evidence that patients significantly increase their welfare by choosing between various different providers and matching their illnesses to the resources that are available at these different providers. This paper suggests that continuing to view patients as passive participants in the health care market gives way to misleading policy suggestions and may in fact reduce the welfare of patients

African Traditional Healers: Incentives and Skill in Health Care Delivery

The benefit of health care comes not just from the ability of health care providers to produce health but from their motivation to do so as well. The fact that traditional healers in Africa are paid on the basis of health outcomes not services provided changes the incentives they face compared to those of modern health care providers. This paper documents these payment methods in Cameroun and explores the different incentives faced by practitioners in government and church-based facilities as well as traditional healers. To test whether such incentives make a difference in the provision of health care I use a multinomial logit analysis of an original data set from Cameroun on patients' choice of provider and show that patients choose practitioners as if they were aware of the difference in incentives. Thus, though patients cannot perfectly evaluate the quality of health they receive or would have received, they can evaluate expected quality by examining incentives

Institutional Structure of Health Care in Rural Cameroun: Structural Estimation of Production in Teams with Unobservable Effort

Traditional healers in Cameroun are paid on an outcome-contingent basis, where payments are linked to the recovery of the patient. On the other hand, organizational providers (government clinics and hospitals and church-based clinics and hospitals) are paid a fixed fee at the time of consultation. Is this "custom" of payment method at the traditional healer a response to a problem of imperfect information in the supply of medical care? Eswaran and Kotwal (1985) suggest that share-cropping is a response to imperfect information in the supply of factor inputs owned by land-lords and tenants. Because different crops require different levels of inputs, one form of contract might be particularly appropriate for some crops but not others. We suggest that contingent-payment contracts are appropriate for some health production technologies and that fixed fee contracts are appropriate for other technologies, where a technology in health care is the medical response indicated be a set of presenting conditions. We fit a contractual model of health care demand to date on observed patterns of provider and contract choice using a Conditional Logit. Effort exerted on behalf of the patient's health is unobservable and is therefore only delivered according to the incentives that exist within the implicit contract between patient and provider. Patients create an approximate market for medical effort by choosing between discreet contract types. Institutions and organizations play an essential role in the creation of credible quality. With simulation we show that the government can greatly reduce transaction costs (and increase net utility) by specifically recognizing its role as an organization within the context of the institution of modern health care

Asymmetric Information and the Role of NGOs in African Health Care

In African health care the "miracle of the market "has not occurred. Patients exhibit willingness to pay for health care and yet practitioners are unable to sell their services. Simultaneously non-governmental organizations (NGOs) are running successful health facilities for which patients are willing to pay. We develop a model of the demand for health care in the presence of asymmetric information that allows us to view African health care in the framework of the New Institutional Economics literature. We use previously published empirical results to support the validity of this view and show that NGOs have the institutional capacity to deliver high quality health care, whereas private practitioners, even with good intentions, will not easily succeed. Having arrived at the well documented conclusion that NGOs provide high quality services through theory allows us to draw policy conclusions on ways to extend the provision of health services

Institutional Solutions to the Principal-Agent Problem in African Health Care

Free markets for health care in Africa do not function properly, in that patients exhibit willingness to pay for health care and yet practitioners are unable to sell their services. It is widely acknowledged that health markets everywhere are troubled with imperfect information. Therefore it is no surprise that free markets and spot contracts do not lead to an efficiently functioning market for health care. When issues of agency are not resolved we find practitioners specializing in the sale of pharmaceuticals but not using their skills as diagnosticians. Mechanisms that can reduce agency cost are beneficial to both patients and practitioners. This paper draws on theory and empirical evidence to examine what institutions are necessary to solve the problems of imperfect information in this context. We dismiss government regulation because the regulatory capacity does not exist in most African countries. Theory suggests that self-regulation by professional bodies should arise as privatization continues. Empirical evidence, however, suggests that this conclusion is overly-optimistic. On the other hand, referral networks perform much the same function but do not require centralized control. The most successful institution for the delivery of quality medical care in Africa is that of independent, pre-existing value-based organizations (missions) and we suggest their choice of institutional form has contributed to their success

How to Compensate Physicians When Both Patient and Physician Effort Are Unobservable

In this paper, we construct a joint production model of health with two sided asymmetric information and ask the question, "How should physicians be compensated?" We demonstrate theoretically that the preferred physician compensation scheme depends on the illness condition. Outcome-contingent payments are better than effort-contingent payments for illnesses in which the efforts of physicians and patients are highly complementary, or in which both types of effort are important to the outcome. Effort-contingent payments are superior when efforts are not highly complementary, or when either physician or patient effort, but not both are important to the outcome. Evidence to support this theory is provided by an empirical analysis of patient choice of health care providers in Afric

Do health investments improve agricultural productivity?

Determining the causality between health measures and both income and labor productivity remains an ongoing challenge for economists. This review paper aims to answer the question: Does improved population health lead to higher rates of agricultural growth? In attempting to answer this question, we survey the empirical literature at micro and macro levels concerning the link between health investments and agricultural productivity. The evidence from some micro-level studies suggests that inexpensive health interventions can have a very large impact on labor productivity. The macro-level evidence at the country and global level, however, is mixed at best and in some cases suggests that health care interventions have no impact on income, much less on agricultural productivity. At both micro and macro levels, the literature does not provide a clear-cut answer to the question under investigation. Overall, the review reveals a great deal of heterogeneity in terms of estimation methods, definition and measurement of health variables, choice of economic outcomes, single-equation versus multiple-equation approach, and static versus dynamic approach. The actual magnitude of estimated elasticities is difficult to assess in part due to estimation bias caused by the endogeneity of health outcomes. We also found significant gaps in the literature; for example, very little attention is given to demand for health inputs by rural populations and farmers.Agriculture, Growth, health, Investment, Nutrition, productivity,