Financial Incentives in Health: The Magic Bullet We Were Hoping For? ADAM WAGSTAFF RESEARCH MANAGER, DEVELOPMENT RESEARCH GROUP, THE WORLD BANK

Financial Incentives in Health:

The Magic Bullet We Were Hoping For?

ADAM WAGSTAFF•

RESEARCH MANAGER, DEVELOPMENT RESEARCH GROUP, THE WORLD BANK

Introduction

• Low rates of intervention coverage reflect supply- and demand-side factors. Hence interest in exploring financial incentives on both sides

• Since 2007, WBG has been given $436 million to spend on projects that help governments move away from low-powered incentives (budgets and salaries) to a mix of budgets, salaries and bonus payments linked to results

• Most of the $436m Health Results Innovation Trust Fund (HRITF) is supporting pilot performance-based financing (PBF) projects in low-income countries

• Funds are leveraging $2.4 billion to support project implementation from the International Development Association, the arm of the World Bank that provides concessional lending to low-income countries

• Overriding goal is to accelerate countries’ progress towards health MDGs • All but 8 of the 42 projects (six of which are standalone studies of middle-income programs) are

scheduled to produce an IE, many using a prospective RCT design. So far, only 3 have done so—Argentina, DRC and Rwanda

World Bank HRITF PBF projects, and IE status

Completed

Completed

Completed

Impact Evaluation?NoYes

Reasons not to rely exclusively on the HRITF IE studies• The studies are going to take some time to complete—but countries are making

decisions now on whether to introduce PBF or scale it up• The evidence may come too late for a lot of key decisions which are being based on a very

flimsy evidence base

• It’s likely there will be quite a few questions the HRITF IE studies won’t give us answers to: • We won’t have a good sense of whether the results will hold as the program is taken from

the experimental phase and scaled up nationally• There will be some important design questions that these experiments won’t be able to

address, because:• The experiment is too small, or • The resources aren’t available, or • The questions are considered ‘second-order’, and the people responsible for the projects are keen to

focus on what they see as the ‘first-order’ question of whether financial incentives ‘work’

Getting a bigger and broader evidence base to facilitate decision-making today • Retrospective IE studies of PBF schemes, that identify effects through

phasing of roll-out, provide a complementary evidence base• These studies are typically of at-scale programs—cf. RCTs • They can exploit design variations to answer design questions that often can’t

be answered in a prospective RCT for political economy and other reasons

• Evidence base can also be expanded by looking at evidence on demand-side financial incentives—a slightly older literature• Demand-side financial incentives could complement supply-side financial

incentives, but they can be and often are standalone• Raises question of whether resources spent on PBF schemes would be better

spent on demand-side financial incentives

A (partial) meta-analysis of supply- and demand-side financial incentives focusing on MCH services

Type Program Studies

Supply-side

Argentina PBF Gertler, P., P. Giovagnoli and S. Martinez (2014). Rewarding provider performance to enable a healthy start to life: evidence from Argentina's Plan Nacer. The World Bank, Policy Research Working Paper Series, 6884.

Burundi PBF Bonfrer, I., E. Van de Poel and E. Van Doorslaer (2014). "The effects of performance incentives on the utilization and quality of maternal and child care in Burundi." Soc Sci Med 123: 96-104.

Cambodia PBF Van de Poel, E., G. Flores, P. Ir and O. O'Donnell (2015). "Impact of Performance-Based Financing in a Low-Resource Setting: A Decade of Experience in Cambodia." Health Economics: n/a-n/a.

DRC PBF World Bank (n.d.). Impact Evaluation on Performance-Based Financing In Haut-Katanga District, Democratic Republic Of The Congo. Washington, D.C. , World Bank.

Rwanda PBF Basinga, P., P. J. Gertler, A. Binagwaho, A. L. Soucat, J. Sturdy and C. M. Vermeersch (2011). "Effect on maternal and child health services in Rwanda of payment to primary health-care providers for performance: an impact evaluation." Lancet 377(9775): 1421-1428.

Demand-side

Cambodia MV Van de Poel, E., G. Flores, P. Ir, O. O'Donnell and E. Van Doorslaer (2014). "Can vouchers deliver? An evaluation of subsidies for maternal health care in Cambodia." Bull World Health Organ 92(5): 331-339.

El Salvador Red Solidaria CCT de Brauw, A. and A. Peterman (2011). Can conditional cash transfers improve maternal health and birth outcomes?: Evidence from El Salvador's Comunidades Solidarias Rurales, International Food Policy Research Institute (IFPRI).

India JSY MV Powell-Jackson, T., S. Mazumdar and A. Mills (2015). "Financial incentives in health: New evidence from India's Janani Suraksha Yojana." Journal of Health Economics.

MexicoProgresa / Opportunidades CCT

Barber, S. L. and P. J. Gertler (2009). "Empowering women to obtain high quality care: evidence from an evaluation of Mexico's conditional cash transfer programme." Health Policy Plan 24(1): 18-25. Barham, T. (2005). Barham, T. (2011). "A healthier start: The effect of conditional cash transfers on neonatal and infant mortality in rural Mexico." Journal of Development Economics 94(1): 74-85. "The impact of the Mexican conditional cash transfer on immunization rates." Unpublished manuscript, Department of Agriculture and Resource Economics, University of California at Berkeley, CA.

Nepal Safe Delivery Incentive Program MV Powell-Jackson, T. and K. Hanson (2012). "Financial Incentives for Maternal Health: Impact of a National Programme in Nepal." Journal of Health Economics 31 1: 271-284.

Nicaragua Red de Proteccion Social CCT

Barham, T. and J. A. Maluccio (2009). "Eradicating diseases: The effect of conditional cash transfers on vaccination coverage in rural Nicaragua." Journal of Health Economics 28(3): 611-621.

Zimbabwe CCT & UCT Robertson, L., P. Mushati, J. W. Eaton, L. Dumba, G. Mavise, J. Makoni, C. Schumacher, T. Crea, R. Monasch, L. Sherr, G. P. Garnett, C. Nyamukapa and S. Gregson "Effects of unconditional and conditional cash transfers on child health and development in Zimbabwe: a cluster-randomised trial." The Lancet 381(9874): 1283-1292.

Demand vs. supply

HondurasProgram de Asignacion Familiar CCT vs service package

Morris, S. S., R. Flores, P. Olinto and J. M. Medina (2004). "Monetary incentives in primary health care and effects on use and coverage of preventive health care interventions in rural Honduras: cluster randomised trial." Lancet 364(9450): 2030-2037.

India Immunization camp vs. incentive

Banerjee, A. V., E. Duflo, R. Glennerster and D. Kothari (2010). "Improving immunisation coverage in rural India: clustered randomised controlled evaluation of immunisation campaigns with and without incentives." BMJ 340: c2220.

Non-financial Guatemala SMS reminder Busso, M., J. Cristia and S. Humpage (2015). "Did You Get Your Shots? Experimental Evidence on the Role of Reminders." Journal of Health Economics, in press.

MDG goal Targets Official indicators Additional core intermediate monitoring indicators §

Goal 1: Eradicate extreme poverty and hunger

Halve, between 1990 and 2015, the proportion of people who suffer from hunger.

Prevalence of underweight children under five years of age Proportion of population below minimum level of dietary energy consumption

Percentage of children aged 6 to 59 months who received one dose of vitamin A in the past six months, proportion of infants under six months who are exclusively breastfed

Goal 4: Reduce child mortality

Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate

Under-five mortality rateInfant mortality rateMeasles immunization among children under one

Proportion of infants under six months who are exclusively breastfed, proportion of surviving infants who have received a dose of measles vaccine by their first birthday, proportion of children with fast or difficult breathing in the past two weeks who received an appropriate antibiotic, proportion of children with diarrhea in the past two weeks who received oral rehydration therapy (ORT), proportion of children under five who slept under an insecticide-treated net the previous night (in malarious areas), proportion of children with fever in the past two weeks who received an appropriate anti-malarial (in malarious areas)

Goal 5: Improve maternal health

Reduce by three-quarters, between 1990 and 2015, the maternal mortality ratio

Maternal mortality ratioProportion of births attended by skilled health personnel

Contraceptive prevalence rate, percentage of women with any antenatal care, provision of emergency obstetric care, syphilis in pregnant women and proportion that are properly treated, percentage of women receiving antenatal care who receive at least two to three intermittent preventive malaria treatments during pregnancy (in malarious areas)

Goal 6: Combat HIV/AIDS, malaria and other diseases

Have halted by 2015 and begun to reverse the spread of HIV/AIDS

HIV prevalence among 15- to 24-year-old pregnant womenCondom use rate of the contraceptive prevalence rateNumber of children orphaned by HIV/AIDS

Percentage of persons using a condom at last higher-risk sex, percentage of sexually transmitted infection clients who are appropriately diagnosed and treated according to guidelines, percentage of HIV-positive women receiving anti-retroviral treatment during pregnancy to prevent mother-to-child transmission of HIV

Have halted by 2015 and begun to reverse the incidence of malaria and other major diseases

Prevalence of and death rate associated with malariaProportion of population in malaria risk areas using effective malaria prevention and treatment measures

Percentage of patients with uncomplicated malaria who received treatment within 24 hours of onset of symptoms, percentage of children under five sleeping under insecticide-treated nets, percentage of pregnant women sleeping under insecticide-treated nets, percentage of pregnant women who have taken chemoprophylaxis or drug treatment for malaria

Prevalence of and death rates associated with tuberculosisProportion of tuberculosis cases detected and cured under directly observed treatment, short-course (DOTS)

Percentage of estimated new smear-positive tuberculosis cases that were registered under the DOTS approach

Effects on immunization

Partially shaded indicates not statistically significant at 10% level

Guatemala SMS reminderIndia immunization camp & incen...

India immunization campHonduras CCT & service package

Honduras service packageHonduras Program de Asignacion F...

Zimbabwe UCTZimbabwe CCT

Nicaragua Red de proteccion Socia...Nepal Safe Delivery Incentive Pr...

Mexico Progresa / Opportunidade...India JSY MV

El Salvador Red Solidaria CCTCambodia MV

Rwanda PBFDRC PBF

Cambodia PBFBurundi PBF

Argentina PBF

Ince

ntive

vs. s

uppl

y-sid

ePB

F

-20% -10% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

3%567%

217%

14%

1%11%

2%4%

31%

3%

-8%

3%

5%15%

Base Effect

Effects on ANC (usually 3+ visits)


Guatemala SMS reminderIndia immunization camp & incen...


Honduras service packageHonduras Program de Asignacion F...


Nicaragua Red de proteccion Socia...Nepal Safe Delivery Incentive Pr...

Mexico Progresa / Opportunidade...India JSY MV


Rwanda PBFDRC PBF


Argentina PBF

Ince

ntive

vs. s

uppl

y-sid

ePB

F

-20% 0% 20% 40% 60% 80% 100%

48%

38%

49%

13%

4%

-8%4%

4%

4%0%

Base Effect

Effects on facility deliveries


Guatemala SMS reminderIndia immunization camp & ince...


Honduras service packageHonduras Program de Asignacio...


Nicaragua Red de proteccion So...Nepal Safe Delivery Incentive ...

Mexico Progresa / Opportunida...India JSY MV


Rwanda PBFDRC PBF


Argentina PBF

Ince

ntive

vs. s

uppl

y-sid

ePB

F

-20% 0% 20% 40% 60% 80% 100%

18%

38%

21%

24%23%

-2%10%

6%

Base Effect

Effects on whether tetanus received during ANC


Guat...India...India...

Hondu...Hondu...Hondu...

Zimb...Zimb...Nicar...Nepal...Mexic...

India...El Sal...Camb...Rwan...

DRCCamb...Burun...Argen...

Ince

ntive

vs.

supp

ly-s

ide

PBF

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

14%

12%

7%

4%

7%

16%

3%

Base Effect

Effects on neonatal mortality rate


Guatemala SMS reminderIndia immunization camp & ince...


Honduras service packageHonduras Program de Asignacio...


Nicaragua Red de proteccion So...Nepal Safe Delivery Incentive ...

Mexico Progresa / Opportunida...India JSY MV


Rwanda PBFDRC PBF


Argentina PBF

Ince

ntive

vs. s

uppl

y-sid

ePB

F

-0.010 0.000 0.010 0.020 0.030 0.040 0.050

-15%-7%

-7%

-21%

Base Effect

Mean effect size vs. % statistically significant

0.000 0.050 0.100 0.150 0.200 0.250 0.300 0.350 0.4000%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

100%

100%

100%

50%

0% 0%

100%100%

75%80%

33%

67%

50%

0%20%

60%

50%

Mean effect size across indicators (excl. neonatal mortality)

% e

ffec

t si

zes

stati

stica

lly s

igni

fican

t (in

cl. n

eona

tal m

orta

lity)

The poor vs. the better off—differential impacts


Poorest Richest Poorest Richest Poorest Richest Poorest Richest Poorest Richest Poorest RichestImmunization -- full ANC visits Deliveries – govt. facility ANC tetanus ANC BP meast Postnatal care

-0.05

0

0.05

0.1

0.15

0.2

0.25

India JSY MV Cambodia MV Cambodia PBF Burundi PBF

Conclusions• Financial incentives have worked, but…

• Demand-side incentives appear to have achieved more on health MDG indicators• PBF doesn’t appear to have been pro-poor, and in some cases doesn’t poor haven’t benefitted• Demand- and supply-side incentives work on different margins. Demand-side incentives encourage people to go to a facility, while

supply-side incentives encourage health providers to deliver more and better care to people who have made it to the facility• Demand- and supply-side incentives are complements, and are best combined; if only one is feasible, it might be better to go with the

demand-side approach

• Crowd-out is underappreciated:• In Cambodia and India, the scheme crowded out some private-sector facility deliveries. The government is using scarce resources to

subsidize something people are willing to pay for, and may not be delivering better quality services

• Using financial incentives to relieve one bottleneck isn’t much good if bottlenecks remain further up or down the results chain:• PBF has had little effect on ANC. Yet steps taken prior to childbirth can improve the survival prospects of neonates• Are the facilities we’re encouraging people to use through these schemes equipped to deliver the relevant intra- and postpartum

interventions? Are they better than the private facilities the Cambodia and India schemes steered women away from? • Did the schemes do enough to increase the delivery of key community-based neonatal interventions?

• PBF design matters• Cambodia study suggests that structure of incentives and degree of autonomy providers makes a difference. (Results worse under a

halfway-house arrangement where an external contractor had some but not complete autonomy; in places where this didn’t happen, even if the contracting was internal to the MOH, impacts were more likely to be found.)

Documents

Financial Incentives in Health: The Magic Bullet We Were Hoping For? ADAM WAGSTAFF RESEARCH MANAGER, DEVELOPMENT RESEARCH GROUP, THE WORLD BANK