Pay for Performance in Health Care: International Evidence
Sunday, Jan. 7, 2018 8:00 AM - 10:00 AM
- Chair: Adam Wagstaff, World Bank
Pay-for-Performance and Selective Referral in Long-Term Care
AbstractWe examine how pay-for-performance (P4P) affects long-term care (LTC), focusing on adult day-care services. LTC expenditure is expected to increase dramatically, and P4P for LTC could potentially improve welfare by providing better outcomes at lower costs. However, little is known about the effects of P4P on LTC. We exploit a natural experiment in Japan in which a local government (Shiga prefecture) introduced an outcome-based bonus payment in addition to nationally uniform fee-for-service payments. We construct unique matched user-care manager-provider data using the universe of LTC claims data in which care managers’ referral decisions are directly observed. At the population level, using all other prefectures as a control, we find weak evidence that P4P affects LTC outcomes; however, the impact appears very small if it exists at all. Because P4P does not affect LTC expenditures, we conclude that the overall effect of current P4P is negligible. In contrast, at a disaggregated level, within-treatment comparisons find stronger evidence of user selection. After P4P, LTC outcomes improve more when care managers refer users to affiliated providers as opposed to non-affiliated providers. Moreover, care managers refer more users whose care levels are relatively more easily improved to affiliated providers. A lack of risk adjustment and vertical integration of care management and day-care service appear to explain the selection. A successful P4P would need to address these issues.
Physician Performance Pay: Experimental Evidence
AbstractWe present causal evidence on the effect of performance pay on medical service provision from an artefactual field experiment with a representative sample of German resident primary care physicians. In the experiment, we introduce performance pay, which is adjusted according to patients’ severities of illnesses, to complement capitation. Performance pay is granted if a health care quality threshold is met. In line with standard theory, we find that performance pay significantly reduces underprovision of medical services, and, on average, it increases the patients’ health benefit. The magnitude of these effects depends, however, on patients’ characteristics. Findings are robust towards variations in levels of performance pay. Beyond standard theory, we find evidence for a crowding-out of altruistic behavior when physicians receive performance pay. Physicians’ characteristics such as gender and practice location significantly affect crowding-out of altruistic behavior.
Showmanship: The Relationship Between Health Care Provider Generosity and Provider Effort
AbstractHealthcare in many parts of the developing world is characterized by high access to care, but very low quality of care. This paper uses novel data from rural Bihar, India, to explore the relationship between healthcare provider generosity and quality of care delivered by health care providers. The data include a lab-in-field generosity game and measures of healthcare provider performance when providers do and do not know that they are being observed. We find that providers exhibit high levels of generosity to a health-related NGO in the area and high levels of effort when they know that they are being observed. However, when measured using standardized patient methodology – i.e. when providers do not know that they are being observed – measures of provider generosity are not correlated with high levels of provider effort.
- I0 - General