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

1. Making health service work for the poor:incentives for strengthening health systems performance Berlin, 8-10 July 2002 Orvill Adams Director, Department of Health Service Provision Evidence and Information for Health Policy

2. 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

3. 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

4. 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

5. OverallHSPA 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

6.   Health Responsiveness   Financial Contribution Health system goals Level Distribution Efficiency  Quality Equity

7. WHO world health survey CORE modules • Based on scientific review of existing instruments • Developed through: • Cognitive interviews & cultural applicability tests • Reliability - stability of application • Cross-population comparability 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) Flexible shell: additional modules could be added by countries as needed

8. 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

9. Definition of effective coverage The probability of receiving a necessary health intervention conditional on the presence of a health care need

10. 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

11. Health inequalities: Ghana

12. Health inequalities: Indonesia

13. Decomposition of inequality index

14. Service provision needs to be more efficient • Through better information & accountability • Through direct incentives

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

16. 5 Barbados Trinidad & Tobago 4 Surinam Panama 3 Enfermeros por 1.000 inhabitantes Jamaica Costa Rica 2 Guyana Guatemala Paraguay El Salvador Peru 1 Venezuela Dominican Republic Argentina Uruguay Colombia Mexico Chile Bolivia Honduras Ecuador Nicaragua Brazil Haiti 0 0 1 2 3 Médicos por 1.000 inhabitantes Inefficient resource allocation: Ratio of nurses to doctors in L.A. and Caribbean 3 nurses per doctor in N. America Source: PAHO, 1998

17. 150 MWI MOZ AGO GIN MLI NER TCD ETH ZMB IRQ KHM LAO YEM BFA BDI UGA BEN PAK MDG NPL TZA CIV MMR NGA BGD SDN 75 GHA HTI BOL IND SEN KEN PRK CMR EGY ZWE MAR IDN ZAF HND TUR PER GTM DOM VNM IRN PHL BRA ECU SLV THA CHN DZA MEX SYR TUN TJK KAZ UZB Infant Mortality (per 1,000 births) COL LBY PRY AZE VEN ARG ROM SAU RUS LKA BGR 15 UKR POL BLR GEO MYS CHL SVK HUN KOR CUB GRC CZE USA PRT ISR ITA CAN GBR BEL AUS ESP NLD AUT DNK DEU CHE FRA JPN FIN SWE 20.00 200.00 2000.00 Public Health Expenditure ($PPP/person) Infant mortality varies across countries that spend similar amounts on health Note: For countries with population > 5 million Source: WHO

18. Out-of-pocket share declines with income 100 80 60 Out-of-pocket share of health spending (%) 40 20 Regression Line 0 10000 20000 30000 40000 GDP Per Capita (ppp$)

19. 1 1 .8 .8 .6 .6 .4 .4 .2 .2 0 0 1 2 3 4 5 6 7 8 9 10 10 1 2 3 4 5 6 7 8 9 1 .8 .6 .4 .2 0 1 2 3 4 5 6 7 8 9 10 Burundi Latvia HFC HFC Expenditure decile HFC Romania

20. 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

21. Principal and agent: Different objectives Different information Cost of restructuring is high Efficient contracts are hard to find Sources of inefficiency: the agency problem

22. 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? Approaches to the agency problem

23. Models Command & control Performance contracts Internal markets Contests Competition Examples Military Corporatized hospital Health districts Water concessions Primary schools What has been tried?

24. 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 private sector . . .

25. 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

26. 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 Health systems have the problems of markets . . .

27. 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” . . . and problems of bureaucracies

28. Improving health services for the poor through incentives • Purchasing insurance coverage: Colombia • Rewarding performance: Haiti • Incentives for staff: Kenya

29. Coverage expanded especially among the poorin Colombia Subsidized Contributors Fuente: Sanchez, 2000

30. 90 Target Result 80 70 Baseline 60 50 40 30 20 10 0 Immunization 4+ FP available 3+ prenatal FP discontin. ORT Correct ORT Results of active purchasing: NGO in Haiti Source: R. Eichler, “Strategic Purchasing in Haiti to Improve Health”, EUROLAC Case Study, World Bank, 2002.

31. Improved financial performance in Kenya Six-month total gain or loss Source: Rena Eichler. Performance-based reimbursement of rural primary care providers: evidence from Kenya

32. 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