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Performance-Based Financing, Motivation and Final Output in the Health Sector: Experimental Evidence from the Democratic Republic of Congo

Author

Listed:
  • Elise Huillery

    (Département d'économie)

  • Juliette Seban

    (Centre d'économie de la Sorbonne)

Abstract

Performance-based financing becomes a common strategy to improve health sector quality. The findings of this paper imply that performance-based financing should take motivational effects and levels of provider capacity into account. Using a field experiment in the Democratic Republic of Congo, we find that financial incentives led to more effort from health workers on rewarded activities, without deterring effort on non-rewarded activities. We also find a shift from intrinsic to extrinsic motivation. Finally, the increased effort by health workers proved unsuccessful and led to a reduction in revenue, suggesting that health workers lacked the capacity to develop appropriate strategies to perform.

Suggested Citation

  • Elise Huillery & Juliette Seban, 2014. "Performance-Based Financing, Motivation and Final Output in the Health Sector: Experimental Evidence from the Democratic Republic of Congo," Sciences Po Economics Discussion Papers 2014-12, Sciences Po Departement of Economics.
  • Handle: RePEc:spo:wpecon:info:hdl:2441/4pmvo3bm7m9claao2gl0337ip4
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    References listed on IDEAS

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    1. Grant Miller & Kimberly Singer Babiarz, 2013. "Pay-for-Performance Incentives in Low- and Middle-Income Country Health Programs," NBER Working Papers 18932, National Bureau of Economic Research, Inc.
    2. Forsberg, Ewa & Axelsson, Runo & Arnetz, Bengt, 2001. "Financial incentives in health care. The impact of performance-based reimbursement," Health Policy, Elsevier, vol. 58(3), pages 243-262, December.
    3. Uri Gneezy & Stephan Meier & Pedro Rey-Biel, 2011. "When and Why Incentives (Don't) Work to Modify Behavior," Journal of Economic Perspectives, American Economic Association, vol. 25(4), pages 191-210, Fall.
    4. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
    5. Emir Kamenica, 2012. "Behavioral Economics and Psychology of Incentives," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 427-452, July.
    6. Edward P. Lazear, 2000. "Performance Pay and Productivity," American Economic Review, American Economic Association, vol. 90(5), pages 1346-1361, December.
    7. Kathleen J. Mullen & Richard G. Frank & Meredith B. Rosenthal, 2010. "Can you get what you pay for? Pay‐for‐performance and the quality of healthcare providers," RAND Journal of Economics, RAND Corporation, vol. 41(1), pages 64-91, March.
    8. Gertler, Paul & Vermeerch, Christel, 2013. "Using Performance Incentives to Improve Medical Care Productivity and Health Outcomes," Institute for Research on Labor and Employment, Working Paper Series qt9qn9q7ph, Institute of Industrial Relations, UC Berkeley.
    9. Benjamin A. Olken & Junko Onishi & Susan Wong, 2012. "Should Aid Reward Performance? Evidence from a Field Experiment on Health and Education in Indonesia," NBER Working Papers 17892, National Bureau of Economic Research, Inc.
    10. Roland Bénabou & Jean Tirole, 2003. "Intrinsic and Extrinsic Motivation," Review of Economic Studies, Oxford University Press, vol. 70(3), pages 489-520.
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    Cited by:

    1. Celhay,Pablo A. & Gertler,Paul J. & Giovagnoli,Paula & Vermeersch,Christel M. J., 2015. "Long-run effects of temporary incentives on medical care productivity," Policy Research Working Paper Series 7348, The World Bank.
    2. repec:eee:socmed:v:208:y:2018:i:c:p:1-8 is not listed on IDEAS
    3. Fabre, Anaïs & Straub, Stéphane, 2019. "The Economic Impact of public private partnerships (PPPs) in Infrastructure, Health and Education: A Review," TSE Working Papers 19-986, Toulouse School of Economics (TSE).
    4. Lohmann, Julia & Houlfort, Nathalie & De Allegri, Manuela, 2016. "Crowding out or no crowding out? A Self-Determination Theory approach to health worker motivation in performance-based financing," Social Science & Medicine, Elsevier, vol. 169(C), pages 1-8.
    5. Mayumana, Iddy & Borghi, Jo & Anselmi, Laura & Mamdani, Masuma & Lange, Siri, 2017. "Effects of Payment for Performance on accountability mechanisms: Evidence from Pwani, Tanzania," Social Science & Medicine, Elsevier, vol. 179(C), pages 61-73.
    6. Pablo Celhay & Paul Gertler & Paula Giavagnoli & Christel Vermeersch, 2016. "Nudging Medical Providers to Adopt and Sustain Better Quality Care Practices," Natural Field Experiments 00537, The Field Experiments Website.
    7. Sergey Shishkin & Aleksandr Temnitsky, 2017. "From Salary to the Performance-Based Remuneration of Russian Physicians: How Motivation at Work is Changing," HSE Working papers WP BRP 08/PSP/2017, National Research University Higher School of Economics.

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