Pay-for-Performance and Anemia Reduction: Evidence from Rural China

Featuring
Marcos Vera-Hernández
Senior Lecturer, University College London

Hosted by
Victoria Fan
Research Fellow, Center for Global Development

The quality of health services in many developing countries is poor, traditionally leading to calls for greater resources to be devoted to service provision. To better align provider incentives with patient and population health, policymakers are increasingly using pay-for-performance schemes to improve health service delivery.

At this CGD seminar, Marcos Vera-Hernández will discuss research comparing the use of budget resources and incentives for reductions in student anemia across 130 Chinese rural primary schools. In this context, findings show that increasing budget resources is modestly more effective than using incentives (although incentives may be more cost-effective). The two interventions function as substitutes – and strikingly, anemia reductions are smaller when incentives and budget supplements are combined than under budget supplements alone. Despite increasing policy interest in performance-based financing, these findings demonstrate limitations in its use and highlight the importance of considering context.