The Design Of Incentives For Health Care Providers In Developing Countries

Whatever the theoretical attractiveness of certain policy options, the fact that public employees are people who make independent decisions about their careers and lifestyles can set bounds on how well government agencies can deliver promised services, such as universal health care, including in rural areas. Hammer and Jack examine the design and limitations of incentives for health care providers to serve in rural areas in developing countries. Governments face two problems: it is costly to compensate well-trained urban physicians enough to relocate to rural areas, and it is difficult to ensure quality care when monitoring performance is costly or impossible.

Whatever the theoretical attractiveness of certain policy options, the fact that public employees are people who make independent decisions about their careers and lifestyles can set bounds on how well government agencies can deliver promised services, such as universal health care, including in rural areas. Hammer and Jack examine the design and limitations of incentives for health care providers to serve in rural areas in developing countries. Governments face two problems: It is costly to compensate well-trained urban physicians enough to relocate to rural areas, and it is difficult to ensure quality care when monitoring performance is costly or impossible.The goal of providing universal primary health care has been hard to meet, in part because of the difficulty of staffing rural medical posts with conscientious caregivers. The problem is providing physicians with incentives at a reasonable cost. Governments are often unable to purchase medical services of adequate quality even from civil servants. Using simple microeconomic models of contracts and competition, Hammer and Jack examine questions about:The design of rural service requirements and options for newly trained physicians.The impact of local competition on the desirable level of training for new doctors.The incentive power that can be reasonably expected from explicit contracts.One problem a government faces is choosing how much training to give physicians it wants to send to rural areas. Training is costly, and a physician relocated to the countryside is outside the government's direct control. Should rural doctors face a ceiling on the prices they charge patients? Can it be enforced?Hammer and Jack discuss factors to consider in determining how to pay rural medical workers but conclude that we might have to set realistic bounds on our expectations about delivering certain kinds of services. If we can identify reasons why the best that can be expected is not particularly good, it might lead us to explore entirely different policy systems. Maybe it is too hard to run certain decentralized systems. Maybe we should focus on less ambitious but more readily achievable goals, such as providing basic infrastructure.This paper - a product of Public Economics, Development Research Group - is part of a larger effort in the group to analyze service delivery in the social sectors.

February 2001 Whatever the theoretical attractiveness of certain policy options, the fact that public employees are people who make independent decisions about their careers and lifestyles can set bounds on how well government agencies can deliver promised services, such as universal health care, including in rural areas. Hammer and Jack examine the design and limitations of incentives for health care providers to serve in rural areas in developing countries. Governments face two problems: it is costly to compensate well-trained urban physicians enough to relocate to rural areas, and it is difficult to ensure quality care when monitoring performance is costly or impossible. The goal of providing universal primary health care has been hard to meet, in part because of the difficulty of staffing rural medical posts with conscientious caregivers. The problem is providing physicians with incentives at a reasonable cost. Governments are often unable to purchase medical services of adequate quality even from civil servants. Using simple microeconomic models of contracts and competition, Hammer and Jack examine questions about: * The design of rural service requirements and options for newly trained physicians. * The impact of local competition on the desirable level of training for new doctors. * The incentive power that can be reasonably expected from explicit contracts. One problem a government faces is choosing how much training to give physicians it wants to send to rural areas. Training is costly, and a physician relocated to the countryside is outside the government's direct control. Should rural doctors face a ceiling on the prices they charge patients? Can it be enforced? Hammer and Jack discuss factors to consider in determining how to pay rural medical workers but conclude that we might have to set realistic bounds on our expectations about delivering certain kinds of services. If we can identify reasons why the best that can be expected is not particularly good, it might lead us to explore entirely different policy systems. Maybe it is too hard to run certain decentralized systems. Maybe we should focus on less ambitious but more readily achievable goals, such as providing basic infrastructure. This paper--a product of Public Economics, Development Research Group--is part of a larger effort in the group to analyze service delivery in the social sectors. The authors may be contacted at [email protected] or [email protected].

This paper assesses the extent to which provider payment mechanisms can help developing countries address their leading health care problems. It first identifies four key problems in the health care systems in developing countries: 1) public facilities, which provide the bulk of secondary and tertiary health care services in most countries, offer services of poor quality; 2) providers cannot be enticed to rural and urban marginal areas, leaving large segments of the population without adequate access to health care; 3) the composition of health services offered and consumed is sub-optimal; and 4) coordination in the delivery of care, including referrals, second opinions, and teamwork, is inadequate. The paper examines each problem in turn and assesses the extent to which changes in provider payments might address it.

Based on careful analysis of burden of disease and the costs ofinterventions, this second edition of 'Disease Control Priorities in Developing Countries, 2nd edition' highlights achievable priorities; measures progresstoward providing efficient, equitable care; promotes cost-effectiveinterventions to targeted populations; and encourages integrated effortsto optimize health. Nearly 500 experts - scientists, epidemiologists, health economists,academicians, and public health practitioners - from around the worldcontributed to the data sources and methodologies, and identifiedchallenges and priorities, resulting in this integrated, comprehensivereference volume on the state of health in developing countries.

Health systems in most low-income countries are under-resourced and underused, failing to meet the needs of those who need health care the most. But what if health service providers-or even patients-were rewarded partially on the basis of their performance? Based on a review of experiences to date, the authors of this volume argue that performance incentives have great potential to improve health care for the world's poor. They are one way to use funding dedicated to individual diseases or interventions to strengthen core health system functions. In Part I, Eichler and Levine provide clear guidance about how to design, implement, and evaluate such programs, whether they target health care providers, patients, or both. Part II comprises a set of case studies that examine the use of such incentives to address a range of health conditions and challenges in diverse countries. Performance Incentives for Global Health: Potential and Pitfalls will help policymakers and program managers in developing countries and in the donor community improve health care systems through the strategic use of performance incentives. Book jacket.

Accompanying CD-Rom has same title as book.

This volume, developed by the Observatory together with OECD, provides an overall conceptual framework for understanding and applying strategies aimed at improving quality of care. Crucially, it summarizes available evidence on different quality strategies and provides recommendations for their implementation. This book is intended to help policy-makers to understand concepts of quality and to support them to evaluate single strategies and combinations of strategies.

The below-par progress towards the Millennium Development Goals in many developing countries has been attributed to the low availability of good quality healthcare services and to the demand-side barriers to access. In this paper, we analyze an incentive design problem faced by a budget-constrained humanitarian organization managing a healthcare service program (e.g., maternal health or HIV services) with different emphasis on the two measures of quality - structural and process. Incentives offered to the healthcare provider (referred to as supply-side incentives) are aimed at improving the availability of good quality services and demand-side incentives are used to encourage patients to seek care. In many developing country health programs, incentive schemes tend to be purely supply-side focused or purely demand-side focused. However, our results suggest that by offering the right combination of incentives to the patients and the provider, program performance can be increased up to 12 times, on average, depending on the service offered. Even within the current practice of using one-sided incentives, there is significant scope for improvement by ensuring that there is better alignment between the incentive scheme and the service offered. In particular, pure supply-side incentive schemes perform better than pure demand-side incentive schemes in programs where there is a higher emphasis on structural quality. The opposite result holds true for programs that place a higher emphasis on process quality and in fact, pure demand-side incentive schemes are optimal when the program focuses exclusively on process quality.