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Different Strokes for Different Folks: Experimental Evidence on the Effectiveness of Input and Output Incentive Contracts for Health Care Providers with Different Levels of Skills

Author

Listed:
  • Manoj Mohanan

    (Duke University)

  • Grant Miller

    (Stanford University & NBER)

  • Katherine Donato

    (Harvard University)

  • Yulya Truskinovsky

    (Harvard T.H. Chan School of Public Health)

  • Marcos Vera-Hernández

    (University College London & IFS)

Abstract

A central issue in designing performance incentive contracts is whether to reward the production of outputs versus use of inputs: the former rewards efficiency and innovation in production, while the latter imposes less risk on agents. Agents with varying levels of skill may perform better under different contractual bases as well—more skilled workers may be better able to innovate, for example. We study these issues empirically through an experiment enabling us to observe and verify outputs (health outcomes) and inputs (guideline adherence) in Indian maternity care. We find that both output and input incentive contracts achieved comparable reductions in post-partum hemorrhage (PPH) rates, the dimension of maternity care most sensitive to provider behavior and the largest cause of maternal mortality. Interestingly, and in line with the theory, providers with advanced qualifications performed better and used new health delivery strategies under output incentives, while providers with and without advanced qualifications performed equally under input incentives.

Suggested Citation

  • Manoj Mohanan & Grant Miller & Katherine Donato & Yulya Truskinovsky & Marcos Vera-Hernández, 2017. "Different Strokes for Different Folks: Experimental Evidence on the Effectiveness of Input and Output Incentive Contracts for Health Care Providers with Different Levels of Skills," Working Papers 464, Center for Global Development.
  • Handle: RePEc:cgd:wpaper:464
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    File URL: https://www.cgdev.org/publication/different-strokes-different-folks-experimental-evidence-effectiveness-input-and-output
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    Cited by:

    1. Singh, Prakarsh & Masters, William A., 2020. "Performance bonuses in the public sector: Winner-take-all prizes versus proportional payments to reduce child malnutrition in India," Journal of Development Economics, Elsevier, vol. 146(C).
    2. Jacky MATHONNAT & Aurore PELISSIER, 2017. "How a Results-Based Financing approach can contribute to the health Sustainable Development Goals - Policy-oriented lessons: what we know, what we need to know and don’t yet know," Working Papers P204, FERDI.

    More about this item

    JEL classification:

    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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