Financial and non-financial incentives
Designing incentives for rural health care providers in developing countries
Overcoming the challenges faced in rural locations that act as disincentives for rural health care providers
Authors:
J. Hammer; W. Jack; World Bank; George Town University
Publisher:
World Bank, 2001
In many developing country settings, and particularly in rural areas, the implementation of anything more than very rudimentary contracts for medical care providers, including public employees, is virtually impossible. Produced by the World Bank and George Town University, this paper examines the kinds of policy levers that governments might conceivably have available to induce physicians to serve in rural areas. It assumes that sophisticated performance-based contracts are difficult to enforce in poorer countries.
Using simple models of screening, and spatial competition, the paper investigates how a government can sort between physicians with low and high opportunity costs of relocation, and how the quality of existing providers (e.g., traditional healers) might affect the government’s training policies. Some common challenges that are faced include the inability to staff and supply medical posts in rural areas, high vacancy rates, high rates of absenteeism, simple lack of conscientious or courteous care, and a frequent lack of supplies such as essential drugs.
Given such disincentives the paper explores how physicians should be compensated and trained, when explicit incentive mechanisms are infeasible. It models the design of rural service options, taking the performance of the physician at village level as fixed.
