Using Performance Incentives to Improve Health Outcomes

This study examines the effect of
performance incentives for health care providers to provide
more and higher quality care in Rwanda on child health
outcomes. The authors find that the incentives had a large
and significant effect on the weight-for-age of children
0-11 months and on the height-for-age of children 24-49
months. They attribute this improvement to increases in the
use and quality of prenatal and postnatal care. Consistent
with theory, They find larger effects of incentives on
services where monetary rewards and the marginal return to
effort are higher. The also find that incentives reduced the
gap between provider knowledge and practice of appropriate
clinical procedures by 20 percent, implying a large gain in
efficiency. Finally, they find evidence of a strong
complementarity between performance incentives and provider skill.