The Design of Incentives for Health Care Providers in Developing Countries : Contracts, Competition, and Cost Control

The authors 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 car...

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Main Authors:	Hammer, Jeffrey S., Jack, William G.
Format:	Policy Research Working Paper
Language:	en_US
Published:	World Bank, Washington, DC 2014
Subjects:	Health providers Health services Rural health services Health professional education Medical education Physicians Primary health care Public health care Incentives
Online Access:	http://hdl.handle.net/10986/19963

id	okr-10986-19963
recordtype	oai_dc
spelling	okr-10986-199632021-04-23T14:03:52Z The Design of Incentives for Health Care Providers in Developing Countries : Contracts, Competition, and Cost Control Hammer, Jeffrey S. Jack, William G. Health providers Health services Rural health services Health professional education Medical education Physicians Primary health care Public health care Incentives The authors 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, the authors examine questions about: a) The design of rural service requirements and options for newly trained physicians. b) The impact of local competition on the desirable level of training for new doctors. c) 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? The authors 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 a 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. 2014-09-04T20:34:11Z 2014-09-04T20:34:11Z 2001-02 http://hdl.handle.net/10986/19963 en_US Policy Research Working Paper;No. 2547 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank, Washington, DC Publications & Research :: Policy Research Working Paper
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	Health providers Health services Rural health services Health professional education Medical education Physicians Primary health care Public health care Incentives
spellingShingle	Health providers Health services Rural health services Health professional education Medical education Physicians Primary health care Public health care Incentives Hammer, Jeffrey S. Jack, William G. The Design of Incentives for Health Care Providers in Developing Countries : Contracts, Competition, and Cost Control
relation	Policy Research Working Paper;No. 2547
description	The authors 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, the authors examine questions about: a) The design of rural service requirements and options for newly trained physicians. b) The impact of local competition on the desirable level of training for new doctors. c) 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? The authors 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 a 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.
format	Publications & Research :: Policy Research Working Paper
author	Hammer, Jeffrey S. Jack, William G.
author_facet	Hammer, Jeffrey S. Jack, William G.
author_sort	Hammer, Jeffrey S.
title	The Design of Incentives for Health Care Providers in Developing Countries : Contracts, Competition, and Cost Control
title_short	The Design of Incentives for Health Care Providers in Developing Countries : Contracts, Competition, and Cost Control
title_full	The Design of Incentives for Health Care Providers in Developing Countries : Contracts, Competition, and Cost Control
title_fullStr	The Design of Incentives for Health Care Providers in Developing Countries : Contracts, Competition, and Cost Control
title_full_unstemmed	The Design of Incentives for Health Care Providers in Developing Countries : Contracts, Competition, and Cost Control
title_sort	design of incentives for health care providers in developing countries : contracts, competition, and cost control
publisher	World Bank, Washington, DC
publishDate	2014
url	http://hdl.handle.net/10986/19963
_version_	1764444175263072256

The Design of Incentives for Health Care Providers in Developing Countries : Contracts, Competition, and Cost Control

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