1. Financial Incentives in Health: The Magic Bullet We Were Hoping For? ADAM WAGSTAFF RESEARCH MANAGER, DEVELOPMENT RESEARCH GROUP, THE WORLD BANK

2. Introduction Low rates of intervention coverage reflect supply- and demand-side factors. Hence interest in exploring financial incentives on both sides Since 2007, WBG has been given $436 million to spend on projects that help governments move away from low-powered incentives (budgets and salaries) to a mix of budgets, salaries and bonus payments linked to results Most of the $436m Health Results Innovation Trust Fund (HRITF) is supporting pilot performance-based financing (PBF) projects in low-income countries Funds are leveraging $2.4 billion to support project implementation from the International Development Association, the arm of the World Bank that provides concessional lending to low-income countries Overriding goal is to accelerate countries’ progress towards health MDGs All but 8 of the 42 projects (six of which are standalone studies of middle-income programs) are scheduled to produce an IE, many using a prospective RCT design. So far, only 3 have done so—Argentina, DRC and Rwanda

3. World Bank HRITF PBF projects, and IE status

4. Reasons not to rely exclusively on the HRITF IE studies The studies are going to take some time to complete—but countries are making decisions now on whether to introduce PBF or scale it up The evidence may come too late for a lot of key decisions which are being based on a very flimsy evidence base It’s likely there will be quite a few questions the HRITF IE studies won’t give us answers to: We won’t have a good sense of whether the results will hold as the program is taken from the experimental phase and scaled up nationally There will be some important design questions that these experiments won’t be able to address, because: The experiment is too small, or The resources aren’t available, or The questions are considered ‘second-order’, and the people responsible for the projects are keen to focus on what they see as the ‘first-order’ question of whether financial incentives ‘work’

5. Getting a bigger and broader evidence base to facilitate decision-making today Retrospective IE studies of PBF schemes, that identify effects through phasing of roll-out, provide a complementary evidence base These studies are typically of at-scale programs—cf. RCTs They can exploit design variations to answer design questions that often can’t be answered in a prospective RCT for political economy and other reasons Evidence base can also be expanded by looking at evidence on demand-side financial incentives—a slightly older literature Demand-side financial incentives could complement supply-side financial incentives, but they can be and often are standalone Raises question of whether resources spent on PBF schemes would be better spent on demand-side financial incentives

6. A (partial) meta-analysis of supply- and demand-side financial incentives focusing on MCH services TypeProgramStudies Supply- side Argentina PBF Gertler, P., P. Giovagnoli and S. Martinez (2014). Rewarding provider performance to enable a healthy start to life: evidence from Argentina's Plan Nacer. The World Bank, Policy Research Working Paper Series, 6884. Burundi PBF Bonfrer, I., E. Van de Poel and E. Van Doorslaer (2014). "The effects of performance incentives on the utilization and quality of maternal and child care in Burundi." Soc Sci Med 123: 96-104. Cambodia PBF Van de Poel, E., G. Flores, P. Ir and O. O'Donnell (2015). "Impact of Performance-Based Financing in a Low-Resource Setting: A Decade of Experience in Cambodia." Health Economics: n/a-n/a. DRC PBFWorld Bank (n.d.). Impact Evaluation on Performance-Based Financing In Haut-Katanga District, Democratic Republic Of The Congo. Washington, D.C., World Bank. Rwanda PBF Basinga, P., P. J. Gertler, A. Binagwaho, A. L. Soucat, J. Sturdy and C. M. Vermeersch (2011). "Effect on maternal and child health services in Rwanda of payment to primary health-care providers for performance: an impact evaluation." Lancet 377(9775): 1421-1428. Demand- side Cambodia MV Van de Poel, E., G. Flores, P. Ir, O. O'Donnell and E. Van Doorslaer (2014). "Can vouchers deliver? An evaluation of subsidies for maternal health care in Cambodia." Bull World Health Organ 92(5): 331-339. El Salvador Red Solidaria CCTde Brauw, A. and A. Peterman (2011). Can conditional cash transfers improve maternal health and birth outcomes?: Evidence from El Salvador's Comunidades Solidarias Rurales, International Food Policy Research Institute (IFPRI). India JSY MVPowell-Jackson, T., S. Mazumdar and A. Mills (2015). "Financial incentives in health: New evidence from India's Janani Suraksha Yojana." Journal of Health Economics. Mexico Progresa / Opportunidades CCT Barber, S. L. and P. J. Gertler (2009). "Empowering women to obtain high quality care: evidence from an evaluation of Mexico's conditional cash transfer programme." Health Policy Plan 24(1): 18-25. Barham, T. (2005). Barham, T. (2011). "A healthier start: The effect of conditional cash transfers on neonatal and infant mortality in rural Mexico." Journal of Development Economics 94(1): 74-85. "The impact of the Mexican conditional cash transfer on immunization rates." Unpublished manuscript, Department of Agriculture and Resource Economics, University of California at Berkeley, CA. Nepal Safe Delivery Incentive Program MV Powell-Jackson, T. and K. Hanson (2012). "Financial Incentives for Maternal Health: Impact of a National Programme in Nepal." Journal of Health Economics 31 1: 271- 284. Nicaragua Red de Proteccion Social CCT Barham, T. and J. A. Maluccio (2009). "Eradicating diseases: The effect of conditional cash transfers on vaccination coverage in rural Nicaragua." Journal of Health Economics 28(3): 611-621. Zimbabwe CCT & UCT Robertson, L., P. Mushati, J. W. Eaton, L. Dumba, G. Mavise, J. Makoni, C. Schumacher, T. Crea, R. Monasch, L. Sherr, G. P. Garnett, C. Nyamukapa and S. Gregson "Effects of unconditional and conditional cash transfers on child health and development in Zimbabwe: a cluster-randomised trial." The Lancet 381(9874): 1283-1292. Demand vs. supply Honduras Program de Asignacion Familiar CCT vs service package Morris, S. S., R. Flores, P. Olinto and J. M. Medina (2004). "Monetary incentives in primary health care and effects on use and coverage of preventive health care interventions in rural Honduras: cluster randomised trial." Lancet 364(9450): 2030-2037. India Immunization camp vs. incentive Banerjee, A. V., E. Duflo, R. Glennerster and D. Kothari (2010). "Improving immunisation coverage in rural India: clustered randomised controlled evaluation of immunisation campaigns with and without incentives." BMJ 340: c2220. Non- financial Guatemala SMS reminderBusso, M., J. Cristia and S. Humpage (2015). "Did You Get Your Shots? Experimental Evidence on the Role of Reminders." Journal of Health Economics, in press.

7. MDG goalTargetsOfficial indicatorsAdditional core intermediate monitoring indicators § Goal 1: Eradicate extreme poverty and hunger Halve, between 1990 and 2015, the proportion of people who suffer from hunger. Prevalence of underweight children under five years of age Proportion of population below minimum level of dietary energy consumption Percentage of children aged 6 to 59 months who received one dose of vitamin A in the past six months, proportion of infants under six months who are exclusively breastfed Goal 4: Reduce child mortality Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate Under-five mortality rate Infant mortality rate Measles immunization among children under one Proportion of infants under six months who are exclusively breastfed, proportion of surviving infants who have received a dose of measles vaccine by their first birthday, proportion of children with fast or difficult breathing in the past two weeks who received an appropriate antibiotic, proportion of children with diarrhea in the past two weeks who received oral rehydration therapy (ORT), proportion of children under five who slept under an insecticide-treated net the previous night (in malarious areas), proportion of children with fever in the past two weeks who received an appropriate anti-malarial (in malarious areas) Goal 5: Improve maternal health Reduce by three- quarters, between 1990 and 2015, the maternal mortality ratio Maternal mortality ratio Proportion of births attended by skilled health personnel Contraceptive prevalence rate, percentage of women with any antenatal care, provision of emergency obstetric care, syphilis in pregnant women and proportion that are properly treated, percentage of women receiving antenatal care who receive at least two to three intermittent preventive malaria treatments during pregnancy (in malarious areas) Goal 6: Combat HIV/AIDS, malaria and other diseases Have halted by 2015 and begun to reverse the spread of HIV/AIDS HIV prevalence among 15- to 24- year-old pregnant women Condom use rate of the contraceptive prevalence rate Number of children orphaned by HIV/AIDS Percentage of persons using a condom at last higher-risk sex, percentage of sexually transmitted infection clients who are appropriately diagnosed and treated according to guidelines, percentage of HIV-positive women receiving anti-retroviral treatment during pregnancy to prevent mother-to-child transmission of HIV Have halted by 2015 and begun to reverse the incidence of malaria and other major diseases Prevalence of and death rate associated with malaria Proportion of population in malaria risk areas using effective malaria prevention and treatment measures Percentage of patients with uncomplicated malaria who received treatment within 24 hours of onset of symptoms, percentage of children under five sleeping under insecticide-treated nets, percentage of pregnant women sleeping under insecticide-treated nets, percentage of pregnant women who have taken chemoprophylaxis or drug treatment for malaria Prevalence of and death rates associated with tuberculosis Proportion of tuberculosis cases detected and cured under directly observed treatment, short-course (DOTS) Percentage of estimated new smear-positive tuberculosis cases that were registered under the DOTS approach

8. Effects on immunization Partially shaded indicates not statistically significant at 10% level

9. Effects on ANC (usually 3+ visits) Partially shaded indicates not statistically significant at 10% level

10. Effects on facility deliveries Partially shaded indicates not statistically significant at 10% level

11. Effects on whether tetanus received during ANC Partially shaded indicates not statistically significant at 10% level

12. Effects on neonatal mortality rate Partially shaded indicates not statistically significant at 10% level

13. Mean effect size vs. % statistically significant

14. The poor vs. the better off—differential impacts Partially shaded indicates not statistically significant at 10% level

15. Conclusions Financial incentives have worked, but… Demand-side incentives appear to have achieved more on health MDG indicators PBF doesn’t appear to have been pro-poor, and in some cases doesn’t poor haven’t benefitted Demand- and supply-side incentives work on different margins. Demand-side incentives encourage people to go to a facility, while supply-side incentives encourage health providers to deliver more and better care to people who have made it to the facility Demand- and supply-side incentives are complements, and are best combined; if only one is feasible, it might be better to go with the demand-side approach Crowd-out is underappreciated: In Cambodia and India, the scheme crowded out some private-sector facility deliveries. The government is using scarce resources to subsidize something people are willing to pay for, and may not be delivering better quality services Using financial incentives to relieve one bottleneck isn’t much good if bottlenecks remain further up or down the results chain: PBF has had little effect on ANC. Yet steps taken prior to childbirth can improve the survival prospects of neonates Are the facilities we’re encouraging people to use through these schemes equipped to deliver the relevant intra- and postpartum interventions? Are they better than the private facilities the Cambodia and India schemes steered women away from? Did the schemes do enough to increase the delivery of key community-based neonatal interventions? PBF design matters Cambodia study suggests that structure of incentives and degree of autonomy providers makes a difference. (Results worse under a halfway-house arrangement where an external contractor had some but not complete autonomy; in places where this didn’t happen, even if the contracting was internal to the MOH, impacts were more likely to be found.)