Making health service work for the poor: incentives for strengthening health systems performance

World Health Organization

Making health service work for the poor:incentives for strengthening health systems

performance

Berlin, 8-10 July 2002

Orvill AdamsDirector, Department of Health Service Provision

Evidence and Information for Health Policy


Overview

• Policy makers and the public need information

– New data sources– New indicators and measures

• Service provision needs to be more efficient

– through information & accountability– through direct incentives


What policy makers need to know

• Identification of the population at risk - the poor

• Health conditions of the poor

• Degree to which interventions are reaching the poor

• information on provider characteristics and costs


WHO response

• Populations surveys, DHS, LSMS

• World health survey - 91 plus countries, rolling out to 191 over 3 years

• CHOICE

– WHO initiative to provide evidence on the effectiveness and costs of major health interventions for 17 sub-regions of the world

– Cost-effectiveness information can be used to identify the allocatively efficient set of interventions


Overall HSPA objectives

1) Monitor and evaluate attainment of critical outcomes and the efficiency of the

health system in a way that allows comparison overtime and across systems

2) Build an evidence-base on the relationship between the design of the health

system and performance

3) Empower the public with information relevant to their well-being


Health system goals

Health Health

ResponsivenessResponsiveness

Financial ContributionFinancial Contribution

LevelLevel DistributionDistribution

QualityQuality EquityEquity

Efficien

cyE

fficiency


WHO world health survey CORE modules

Modules– Health ( description & valuation)– Health system responsiveness– Health financing and expenditure– Adult mortality – Risk factors and chronic diseases – Assets

Modules (continued)– Coverage key interventions– Provider survey (under

development)

• Based on scientific review of existing instruments • Developed through:

– Cognitive interviews & cultural applicability tests – Reliability - stability of application– Cross-population comparability

Flexible shell:Flexible shell: additional modules could be added by countries as needed additional modules could be added by countries as needed


Coverage interventions

• Maternal care - antenatal care, attended delivery

• Child health - immunization

• Prevention of STI and HIV/AIDS

• Malaria and TB

• HIV/AIDS - mother-to child transmission, ARV treatment, chronic care

• Chronic conditions - angina, epilepsy, asthma, depression, diabetes, arthritis

• Cancer screening, vision and hearing, road traffic injuries

• Water and sanitation


Definition of effective coverage

The probability of receiving a necessary health The probability of receiving a necessary health

intervention conditional on the presence of a intervention conditional on the presence of a

health care needhealth care need

The probability of receiving a necessary health The probability of receiving a necessary health

intervention conditional on the presence of a intervention conditional on the presence of a

health care needhealth care need


Provider characteristics and provider surveys

• Indicators of this instrumental goal (linked to intrinsic goals)

• National health accounts - basic and detailed matrices (type of care, type of provider, service)

• Facility surveys - including aspects of responsiveness, fairness in financing, human resources, provider performance assessment, burden of disease


Health inequalities: Ghana

Child health inequalities in Ghana

0.005.00

10.0015.0020.0025.0030.0035.0040.00

U2MR 1

994

U2MR 1

997

No vacin

ation

s 19

94

No vacin

ation

s 19

97

No ant

enat

al ca

re 1

994

No ant

enat

al ca

re 1

997

%

poorest quintile second third fourth richest quintile

Maternal health inequalities in Ghana

0.00

10.0020.00

30.0040.00

50.0060.00

70.00

% unattended births1994

% unattended births1997

poorest quintile second third

fourth richest quintile


Health inequalities: Indonesia

Maternal health inequalities in Indonesia

0.00

20.00

40.00

60.00

80.00

100.00

% unattended births 1994 % unattended births 1997


Child health inequalities in Indonesia

0.005.00

10.0015.0020.0025.0030.0035.0040.0045.0050.00

U2MR 1

994

U2MR 1

997

No vacin

ation

s 19

94

No vacin

ation

s 19

97

No ant

enat

al ca

re 1

994

No ant

enat

al ca

re 1

997

%



Decomposition of inequality index

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

Para

guay

Com

oro

s

Peru

Guate

mala

Dom

Rep

Zim

babw

e

Boliv

ia

Benin

Moro

cco

Eritr

ea

Bangla

desh

Uganda

Kenya

Ghana

Burk

ina

Colo

mbia

Haiti

Nepal

Nam

ibia

Indonesia

Yem

en

Bra

zil

Uzbekis

tan

Pakis

tan

Egypt

Rw

anda

Mali

Nig

eria

Mozam

biq

ue

Cote

Zam

bia

Mala

wi

Centr

al A

fr

Ineq

uali

ty i

nd

ex

Ineq. in perm income Ineq in education Ineq in hth system access Increasing hth system access Unaccounted variation


Service provision needs to be more efficient

• Through better information & accountability

• Through direct incentives


Why don’t the poor have access to health services?

• The public sector fails:

– Lack of resources?

– Low efficiency?

– Political biased allocation of resources?

• The private sector fails:

– Unequal income distribution and lack of “effective demand”

– Imperfect markets


Inefficient resource allocation: Ratio of nurses to doctors in L.A. and Caribbean

0

1

2

3

4

5

En

ferm

ero

s p

or

1.00

0 in

hab

ita

nte

s

0 1 2 3 Médicos por 1.000 inhabitantes

Guyana

Argentina

Jamaica Costa Rica

Panama

UruguayNicaragua Chile

Haiti Brazil

Barbados

El SalvadorDominican Republic

HondurasBoliviaMexico Colombia

Guatemala

Trinidad & Tobago

Venezuela

Surinam

Paraguay

Ecuador

Peru

3 nurses per doctor in N. America

Source: PAHO, 1998


Infa

nt

Mo

rta

lity

(pe

r 1,

000

bir

ths

)

Public Health Expenditure ($PPP/person)20.00 200.00 2000.00

15

75

150

DZA

AGO

ARG

AUSAUT

AZE

BGD

BLR

BEL

BEN

BOL

BRA

BGR

BFABDIKHM

CMR

CAN

TCD

CHL

CHN

COL

CIV

CUBCZE

PRK

DNK

DOM

ECU

EGY

SLV

ETH

FIN

FRA

GEO

DEU

GHA

GRC

GTM

GIN

HTI

HND

HUN

IND

IDN

IRN

IRQ

ISRITA

JPN

KAZ

KEN

LAO

LBY

MDG

MWI

MYS

MLI

MEX

MAR

MOZ

MMR NPL

NLD

NER

NGAPAK

PRY

PERPHL

POL

PRT

KOR

ROMRUS

SAU

SEN

SVK

ZAF

ESP

LKA

SDN

SWE

CHE

SYRTJKTHA

TUN

TUR

UGA

UKR

GBR

TZA

USA

UZBVEN

VNM

YEMZMB

ZWE

Note: For countries with population > 5 millionSource: WHO

Infant mortality varies across countriesthat spend similar amounts on health


GDP Per Capita (ppp$)

10000 20000 30000 40000

0

20

40

60

80

100

Regression Line

Ou

t-of

-poc

ket

sh

are

of h

ealt

h s

pen

ding

(%

)

Out-of-pocket share declines with income


HF

C

0

.2

.4

.6

.8

1

1 2 3 4 5 6 7 8 9 10

Burundi

HF

C

0

.2

.4

.6

.8

1

1 2 3 4 5 6 7 8 9 10

Latvia

HF

C Expenditure decile

0

.2

.4

.6

.8

1

1 2 3 4 5 6 7 8 9 10

Romania


Why is efficiency of health services important?

• Reduces the amount of public services that can be provided

• Reduces the quality of public services

• Leads to inequities in service provision

• Lowers productivity

• Reduces international competitiveness


Sources of inefficiency: the agency problem

Principal and agent:

• Different objectives

• Different information

• Cost of restructuring is high

• Efficient contracts are hard to find


Approaches to the agency problem

• Non-pecuniary motivation

• Pay for output

• Pay by effort

• Fixed payments and agent assumes risk

• Is it enough?

• Can you precisely define outputs?

• Is effort measurable?

• Can you accept bankruptcies and overpayments?


What has been tried?

Models

• Command & control• Performance contracts• Internal markets• Contests• Competition

Examples

• Military• Corporatized hospital• Health districts• Water concessions • Primary schools


Typically in the private sector . . .

• Non-pecuniary motivation

• Pay for output

• Pay by “effort”

• Fixed payments and agent assumes risk

• “Team players” & awards

• Only for piecework

• Salaried workers

• Contractors


Typically in the public sector . . .

• Motivation and vocation may be difficult to achieve at a large scale

• Limited managerial discretion over workforce

• Measurement of outputs is difficult


Health systems have the problems of markets . . .

Down side:

• Moral hazards

• Administrative and marketing costs

• Difficulty mobilizing public resources

• Variable quality

Potentially:

• Incentives for good performance

• Attention to consumer

• Incentive to collect

• Accommodation of differences among population groups


. . . and problems of bureaucracies

Down side:

• Inefficient allocations that raise costs

• Lack of transparency

• Restricted managerial discretion

• Unresponsive to clients

Potentially:

• National planning

• Easier to be redistributive

• Potentially lower administrative costs

• “Fair”


Improving health services for the poor through incentives

• Purchasing insurance coverage: Colombia

• Rewarding performance: Haiti

• Incentives for staff: Kenya


Coverage expanded especially among the poorin Colombia

0

5

10

15

20

25

30

1990 1995 1997 2000

Aff

ilia

tes

(m

illi

on

s)

Contributors

Subsidized

Fuente: Sanchez, 2000


0

10

20

30

40

50

60

70

80

90

Immunization 3+ prenatal FP discontin. ORT Correct ORT 4+ FP available

Baseline

ResultTarget

Results of active purchasing: NGO in Haiti

Source: R. Eichler, “Strategic Purchasing in Haiti to Improve Health”, EUROLAC Case Study, World Bank, 2002.


Improved financial performance in Kenya

Pilot clinic: Kaaremonthly surplus or deficit

-10,000

-5,000

0

5,000

10,000

15,000

November December January February March April Average

Ke

nya

sh

illin

gs

Pre:surplus/deficit

Post:surplus/ deficit

Control clinic: Nkaacimonthly surplus or deficit

-12000

-10000

-8000

-6000

-4000

-2000

0

2000

4000

November December January February March April Average

Ke

nya

Sh

illin

gs

Pre:surplus/deficit

Post:surplus/ deficit

Source: Rena Eichler. Performance-based reimbursement of rural primary care providers: evidence from Kenya

Study Group (n=5)

Control Group (n=6)

Pre -108,458 98,563Post 37,630 -25,584

Six-month total gain or loss


Conclusion

• When health services are inefficient the poor suffer disproportionately

• Incentives (external and internal) have been shown to work

• WHO programs will provided information need by decision makers

Making health service work for the poor: incentives for strengthening health systems performance

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