[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/aea/aejapp/v11y2019i3p92-127.html
   My bibliography  Save this article

Long-Run Effects of Temporary Incentives on Medical Care Productivity

Author

Listed:
  • Pablo A. Celhay
  • Paul J. Gertler
  • Paula Giovagnoli
  • Christel Vermeersch
Abstract
We show that costs of adjustment as opposed to low perceived value may explain why improved quality care practices diffuse slowly in the medical industry. Using a randomized field experiment conducted in Argentina, we find that temporary financial incentives paid to health clinics for the early initiation of prenatal care motivated providers to test and develop new strategies to locate and encourage pregnant women to seek care in the first trimester of pregnancy. These innovations raised the rate of early initiation of prenatal care by 34 percent while the incentives were being paid in the treatment period. We also find that this increase persisted for at least 24 months after the incentives ended. We show that this is consistent with the presence of up-front costs from adjusting care processes that made it too expensive to develop and implement new strategies to increase early initiation of care in the absence of the incentives. Despite large increases in early initiation of prenatal care, we find no effects on health outcomes.

Suggested Citation

  • Pablo A. Celhay & Paul J. Gertler & Paula Giovagnoli & Christel Vermeersch, 2019. "Long-Run Effects of Temporary Incentives on Medical Care Productivity," American Economic Journal: Applied Economics, American Economic Association, vol. 11(3), pages 92-127, July.
    • Handle: RePEc:aea:aejapp:v:11:y:2019:i:3:p:92-127
    Note: DOI: 10.1257/app.20170128
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/doi/10.1257/app.20170128
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/app.20170128.data
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/app.20170128.appx
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/app.20170128.ds
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Pedro Bordalo & Nicola Gennaioli & Andrei Shleifer, 2013. "Salience and Consumer Choice," Journal of Political Economy, University of Chicago Press, vol. 121(5), pages 803-843.
    2. Elise Huillery & Juliette Seban, 2014. "Performance-Based Financing, Motivation and Final Output in the Health Sector: Experimental Evidence from the Democratic Republic of Congo," SciencePo Working papers hal-01071880, HAL.
    3. Heather Royer & Mark Stehr & Justin Sydnor, 2015. "Incentives, Commitments, and Habit Formation in Exercise: Evidence from a Field Experiment with Workers at a Fortune-500 Company," American Economic Journal: Applied Economics, American Economic Association, vol. 7(3), pages 51-84, July.
    4. Gertler, Paul & Vermeersch, Christel, 2012. "Using performance incentives to improve health outcomes," Policy Research Working Paper Series 6100, The World Bank.
    5. Gertler, Paul & Giovagnoli, Paula & Martinez, Sebastian, 2014. "Rewarding provider performance to enable a healthy start to life : evidence from Argentina's Plan Nacer," Policy Research Working Paper Series 6884, The World Bank.
    6. Edward L. Glaeser & Andrei Shleifer, "undated". "Gary Becker (1930?2014)," Working Paper 174291, Harvard University OpenScholar.
    7. Markus C. Becker, 2004. "Organizational routines : a review of the literature," Post-Print hal-00279010, HAL.
    8. Pedro Bordalo & Nicola Gennaioli & Andrei Shleifer, 2012. "Salience Theory of Choice Under Risk," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(3), pages 1243-1285.
    9. Nicholas Bloom & Carol Propper & Stephan Seiler & John Van Reenen, 2015. "The Impact of Competition on Management Quality: Evidence from Public Hospitals," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 82(2), pages 457-489.
    10. Roland Bénabou & Jean Tirole, 2003. "Intrinsic and Extrinsic Motivation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(3), pages 489-520.
    11. Grant Miller & Kimberly Singer Babiarz, 2013. "Pay-for-Performance Incentives in Low- and Middle-Income Country Health Programs," NBER Working Papers 18932, National Bureau of Economic Research, Inc.
    12. Davidson, Russell & Flachaire, Emmanuel, 2008. "The wild bootstrap, tamed at last," Journal of Econometrics, Elsevier, vol. 146(1), pages 162-169, September.
    13. Robert Gibbons, 1997. "An Introduction to Applicable Game Theory," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 127-149, Winter.
    14. Jonathan T. Kolstad, 2013. "Information and Quality When Motivation Is Intrinsic: Evidence from Surgeon Report Cards," American Economic Review, American Economic Association, vol. 103(7), pages 2875-2910, December.
    15. Markus C. Becker, 2004. "Organizational routines: a review of the literature," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 13(4), pages 643-678, August.
    16. Das, Jishnu & Hammer, Jeffrey, 2005. "Which doctor? Combining vignettes and item response to measure clinical competence," Journal of Development Economics, Elsevier, vol. 78(2), pages 348-383, December.
    17. Flores, Gabriela & Ir, Por & Men, Chean R. & O’Donnell, Owen & van Doorslaer, Eddy, 2013. "Financial protection of patients through compensation of providers: The impact of Health Equity Funds in Cambodia," Journal of Health Economics, Elsevier, vol. 32(6), pages 1180-1193.
    18. Paul Gertler & Christel Vermeersch, 2013. "Using Performance Incentives to Improve Medical Care Productivity and Health Outcomes," NBER Working Papers 19046, National Bureau of Economic Research, Inc.
    19. Jonathan T. Kolstad, 2013. "Information and Quality when Motivation is Intrinsic: Evidence from Surgeon Report Cards," NBER Working Papers 18804, National Bureau of Economic Research, Inc.
    20. Jeffrey Clemens & Joshua D. Gottlieb, 2014. "Do Physicians' Financial Incentives Affect Medical Treatment and Patient Health?," American Economic Review, American Economic Association, vol. 104(4), pages 1320-1349, April.
    21. Stefano DellaVigna, 2009. "Psychology and Economics: Evidence from the Field," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 315-372, June.
    22. Dan Ariely & Uri Gneezy & George Loewenstein & Nina Mazar, 2009. "Large Stakes and Big Mistakes," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(2), pages 451-469.
    23. Suresh de Mel & Craig McIntosh & Christopher Woodruff, 2013. "Deposit Collecting: Unbundling the Role of Frequency, Salience, and Habit Formation in Generating Savings," American Economic Review, American Economic Association, vol. 103(3), pages 387-392, May.
    24. repec:hal:spmain:info:hdl:2441/4pmvo3bm7m9claao2gl0337ip4 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mr. Mauricio Vargas & Santiago Garriga, 2015. "Explaining Inequality and Poverty Reduction in Bolivia," IMF Working Papers 2015/265, International Monetary Fund.
    2. Andrew Dustan & Juan Manuel Hernandez-Agramonte & Stanislao Maldonado, 2018. "Motivating bureaucrats with non-monetary incentives when state capacity is weak: Evidence from large-scale," Natural Field Experiments 00664, The Field Experiments Website.
    3. Wattal, Vasudha & Checkland, Katherine & Sutton, Matt & Morciano, Marcello, 2024. "What remains after the money ends? Evidence on whether admission reductions continued following the largest health and social care integration programme in England," LSE Research Online Documents on Economics 123604, London School of Economics and Political Science, LSE Library.
    4. Ngo, Diana K.L. & Bauhoff, Sebastian, 2021. "The medium-run and scale-up effects of performance-based financing: An extension of Rwanda’s 2006 trial using secondary data," World Development, Elsevier, vol. 139(C).
    5. Galiani, Sebastian & Gertler, Paul J. & Undurraga, Raimundo, 2021. "Aspiration adaptation in resource-constrained environments," Journal of Urban Economics, Elsevier, vol. 123(C).
    6. Bernal, Pedro & Martinez, Sebastian, 2020. "In-kind incentives and health worker performance: Experimental evidence from El Salvador," Journal of Health Economics, Elsevier, vol. 70(C).
    7. Dustan, Andrew & Maldonado, Stanislao & Hernandez-Agramonte, Juan Manuel, 2018. "Motivating bureaucrats with non-monetary incentives when state capacity is weak: Evidence from large-scale field experiments in Peru," MPRA Paper 90952, University Library of Munich, Germany.
    8. Dustan, Andrew & Hernandez-Agramonte, Juan Manuel & Maldonado, Stanislao, 2023. "Motivating bureaucrats with behavioral insights when state capacity is weak: Evidence from large-scale field experiments in Peru," Journal of Development Economics, Elsevier, vol. 160(C).
    9. Lina Maria Ellegård & Jens Dietrichson & Anders Anell, 2018. "Can pay‐for‐performance to primary care providers stimulate appropriate use of antibiotics?," Health Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 39-54, January.
    10. Sayli Javadekar & Kritika Saxena, 2021. "The Seen and the Unseen: Impact of a Conditional Cash Transfer Program on Prenatal Sex Selection," IHEID Working Papers 15-2021, Economics Section, The Graduate Institute of International Studies.
    11. Nava Ashraf & Oriana Bandiera & Edward Davenport & Scott S. Lee, 2020. "Losing Prosociality in the Quest for Talent? Sorting, Selection, and Productivity in the Delivery of Public Services," American Economic Review, American Economic Association, vol. 110(5), pages 1355-1394, May.
    12. Alzúa, María Laura & Katzkowicz, Noemí, 2021. "Pay for performance for prenatal care and newborn health: Evidence from a developing country," World Development, Elsevier, vol. 141(C).
    13. O'Neill, Stephen & Grieve, Richard & Singh, Kultar & Dutt, Varun & Powell-Jackson, Timothy, 2024. "Persistence and heterogeneity of the effects of educating mothers to improve child immunisation uptake: Experimental evidence from Uttar Pradesh in India," Journal of Health Economics, Elsevier, vol. 96(C).
    14. Bauhoff,Sebastian Peter Alexander & Kandpal,Eeshani, 2021. "Information, Loss Framing, and Spillovers in Pay-for-Performance Contracts," Policy Research Working Paper Series 9687, The World Bank.
    15. Singh, Neha S. & Kovacs, Roxanne J. & Cassidy, Rachel & Kristensen, Søren R. & Borghi, Josephine & Brown, Garrett W., 2021. "A realist review to assess for whom, under what conditions and how pay for performance programmes work in low- and middle-income countries," Social Science & Medicine, Elsevier, vol. 270(C).
    16. Bancalari, Antonella & Bernal, Pedro & Celhay, Pablo & Martinez, Sebastian & Sánchez, Maria Deni, 2023. "An Ounce of Prevention for a Pound of Cure: Efficiency of Community-Based Healthcare," IZA Discussion Papers 16350, Institute of Labor Economics (IZA).
    17. Vasudha Wattal & Katherine Checkland & Matt Sutton & Marcello Morciano, 2024. "What remains after the money ends? Evidence on whether admission reductions continued following the largest health and social care integration programme in England," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 25(9), pages 1485-1504, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pablo Celhay & Paul Gertler & Paula Giavagnoli & Christel Vermeersch, 2016. "Nudging Medical Providers to Adopt and Sustain Better Quality Care Practices," Natural Field Experiments 00537, The Field Experiments Website.
    2. Abe Dunn & Adam Hale Shapiro, 2018. "Physician Competition and the Provision of Care: Evidence from Heart Attacks," American Journal of Health Economics, University of Chicago Press, vol. 4(2), pages 226-261, Spring.
    3. Martin Gaynor & Kate Ho & Robert J. Town, 2015. "The Industrial Organization of Health-Care Markets," Journal of Economic Literature, American Economic Association, vol. 53(2), pages 235-284, June.
    4. Attema, Arthur E. & Galizzi, Matteo M. & Groß, Mona & Hennig-Schmidt, Heike & Karay, Yassin & L’Haridon, Olivier & Wiesen, Daniel, 2023. "The formation of physician altruism," Journal of Health Economics, Elsevier, vol. 87(C).
    5. Ding, Hui & Chen, Yiwei & Yu, Min & Zhong, Jieming & Hu, Ruying & Chen, Xiangyu & Wang, Chunmei & Xie, Kaixu & Eggleston, Karen, 2021. "The Effects of Chronic Disease Management in Primary Health Care: Evidence from Rural China," Journal of Health Economics, Elsevier, vol. 80(C).
    6. Clark, Andrew E. & Milcent, Carine, 2018. "Ownership and hospital behaviour: Employment and local unemployment," Social Science & Medicine, Elsevier, vol. 202(C), pages 151-161.
    7. Samuel Bowles & Sandra Polania-Reyes, 2011. "Economic incentives and social preferences: substitutes or complements?," Department of Economics University of Siena 617, Department of Economics, University of Siena.
    8. Michael Geruso & Timothy Layton, 2020. "Upcoding: Evidence from Medicare on Squishy Risk Adjustment," Journal of Political Economy, University of Chicago Press, vol. 128(3), pages 984-1026.
    9. Alzúa, María Laura & Katzkowicz, Noemí, 2021. "Pay for performance for prenatal care and newborn health: Evidence from a developing country," World Development, Elsevier, vol. 141(C).
    10. Diane Alexander, 2017. "How do Doctors Respond to Incentives? Unintended Consequences of Paying Doctors to Reduce Costs," Working Paper Series WP-2017-9, Federal Reserve Bank of Chicago.
    11. Emilia Simeonova & Niels Skipper & Peter R. Thingholm, 2020. "Physician Health Management Skills and Patient Outcomes," NBER Working Papers 26735, National Bureau of Economic Research, Inc.
    12. Anthony Scott & Peter Sivey, 2022. "Motivation and competition in health care," Health Economics, John Wiley & Sons, Ltd., vol. 31(8), pages 1695-1712, August.
    13. Nicholas Bloom & Christos Genakos & Raffaella Sadun & John Van Reenen, 2011. "Management Practices Across Firms and Countries," CEP Discussion Papers dp1109, Centre for Economic Performance, LSE.
    14. Lukas Buchheim & Thomas Kolaska, 2017. "Weather and the Psychology of Purchasing Outdoor Movie Tickets," Management Science, INFORMS, vol. 63(11), pages 3718-3738, November.
    15. David C. Chan, 2018. "The Efficiency of Slacking off: Evidence From the Emergency Department," Econometrica, Econometric Society, vol. 86(3), pages 997-1030, May.
    16. Simona Grassi & Ching-to Albert Ma, 2016. "Information acquisition, referral, and organization," RAND Journal of Economics, RAND Corporation, vol. 47(4), pages 935-960, November.
    17. Morten Olsen & Joshua Gottlieb & David Hemous & Jeffrey Clemens, 2017. "The Spill-over Effects of Top Income Inequality," 2017 Meeting Papers 332, Society for Economic Dynamics.
    18. repec:spo:wpmain:info:hdl:2441/58ao15vh3t9tvakcshade02eov is not listed on IDEAS
    19. Kronlund, Mathias & Pool, Veronika K. & Sialm, Clemens & Stefanescu, Irina, 2021. "Out of sight no more? The effect of fee disclosures on 401(k) investment allocations," Journal of Financial Economics, Elsevier, vol. 141(2), pages 644-668.
    20. Pedersen, Line Bjørnskov & Andersen, Merethe Kirstine Kousgaard & Jensen, Ulrich Thy & Waldorff, Frans Boch & Jacobsen, Christian Bøtcher, 2018. "Can external interventions crowd in intrinsic motivation? A cluster randomised field experiment on mandatory accreditation of general practice in Denmark," Social Science & Medicine, Elsevier, vol. 211(C), pages 224-233.
    21. Elise Huillery & Juliette Seban, 2015. "Financial Incentives are Counterproductive in Non-Profit Sectors: Evidence from a Health Experiment," Working Papers hal-01164460, HAL.

    More about this item

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aejapp:v:11:y:2019:i:3:p:92-127. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.