Conditional Cash Incentive and Use of Health Care Services: New Evidence from a Household Experiment
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ORIGINAL PAPER
Conditional Cash Incentive and Use of Health Care Services: New Evidence from a Household Experiment Ahmad Reshad Osmani1 Accepted: 10 November 2020 © Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract Studies have recently provided insights into the effects of incentive modalities in the health care sector. However, there is insufficient evidence on the underlying causes of the partial effectiveness of these strategies in the health systems of developing countries. This study presents results from a large-scale randomized experiment across 6848 households in Afghanistan that evaluates the impact of a conditional incentive pay scheme on health facilities. Supported by the target-income hypothesis framework and relaxing the compliance assumption in the empirical modeling, the estimated coefficients yield causal effects of the supply-side conditional incentive on the utilization for health care services. After 2 years, the conditional incentive increased the use of pre-targeted maternal and children health care services among the households at lower levels and at contracted-out health facilities. Additionally, the incentive scheme is associated with sizable efficiency gains at the facility level. These gains are realized at the expense of deterring service users’ satisfaction with physicians’ communication qualities. This study establishes that margins of improvement do exist in the supply-side performance conditioning on an organizational structure and the service contractual arrangements of health facilities. This work provides a framework for the plausible implementation of incentive policies in the health care sector. Keywords Conditional cash incentive · Field experiment · Target-income hypothesis · Noncompliance · Instrumental variables JEL Classification D1 · C93 · I12 · J41
Introduction Applications of financial incentives in the health systems of developing countries have been increasing in prominence among the policy instruments intended to scale up the demand and supply of health care services (Ellis and McGuire 1993). Although increases in the use and provision of health care services are of first-order importance in implementing these incentivized schemes, there are explicit policy and practice gaps in understanding the organizational and institutional structure of incentive recipients. For example, the impacts of an incentive package on the delivery of services could differ by payment mechanism, type of health * Ahmad Reshad Osmani [email protected] 1
School of Accounting, Financial, and Information Services, College of Business and Social Sciences, University of Louisiana Monroe, Monroe, LA 71209, USA
care facility, and involvement of multiple stakeholders in the health system. These differences can have important public policy implications for the impactful provision of incentives in resource-constrained health systems. This study evaluates the causal effects of supply-side monetary incentives on the use of health care services, by exploiting a large-sca
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