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Different Strokes for Different Folks: Experimental Evidence on the Effectiveness of Input and Output Incentive Contracts for Health Care Providers with Different Levels of Skills

Manoj Mohanan (), Grant Miller, Katherine Donato, Yulya Truskinovsky and Marcos Vera-Hernandez ()
Additional contact information
Grant Miller: Stanford University & NBER
Katherine Donato: Harvard University
Yulya Truskinovsky: Harvard T.H. Chan School of Public Health

No 464, Working Papers from Center for Global Development

Abstract: A central issue in designing performance incentive contracts is whether to reward the production of outputs versus use of inputs: the former rewards efficiency and innovation in production, while the latter imposes less risk on agents. Agents with varying levels of skill may perform better under different contractual bases as well—more skilled workers may be better able to innovate, for example. We study these issues empirically through an experiment enabling us to observe and verify outputs (health outcomes) and inputs (guideline adherence) in Indian maternity care. We find that both output and input incentive contracts achieved comparable reductions in post-partum hemorrhage (PPH) rates, the dimension of maternity care most sensitive to provider behavior and the largest cause of maternal mortality. Interestingly, and in line with the theory, providers with advanced qualifications performed better and used new health delivery strategies under output incentives, while providers with and without advanced qualifications performed equally under input incentives.

JEL-codes: D86 J41 O15 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cta, nep-exp, nep-hea and nep-lma
Date: 2017-10-11
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