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Pay for Performance in Lower Income Countries

By April 9, 2013Commentary

Pay-for-performance, and its ultimate embodiment, value-based purchasing, have become common in developed world health systems as a method to encourage delivery of better quality and more appropriate care.  The effectiveness of these approaches, however, is yet to be clearly demonstrated by the research.   (NBER Paper)  A new paper from the National Bureau of Economic Research examines the application of these programs to middle and low-income countries.  The authors focus on four key issues, what to reward, who to reward, how to reward and identification and avoidance of undesirable and unintended consequences of initiating a pay-for-performance program.  They note that many lower income countries have poor health care workforces and that the hope is that pay-for-performance can create rapid improvement.  They go on, however, to address concerns about whether the programs are being properly designed in light of the current state of the research on the key issues they raise, and they further discuss the inadequacies of the research in helping to create an optimum design.  The paper is a helpful reprise of general issues regarding these programs and a warning about two quickly taking developed country approaches, which may not even be working in those countries, to less-developed nations.

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