Using Performance Incentives to Improve Medical Care Productivity and Health Outcomes

This brief summarizes the using performance incentives to improve medical care productivity and health outcomes in Rwanda. The author nested a large-scale field experiment into the national rollout of the introduction of performance pay for medical care providers in Rwanda to study the effect of incentives for health care providers. In order to identify the effect of incentives separately from higher compensation, the author held constant compensation across treatment and comparison groups, a portion of the treatment group's compensation was based on performance whereas the compensation of the comparison group was fixed. The incentives led to a 20 percent increase in productivity, and significant improvements in child health. The author also fined evidence of a strong complementarity between performance incentives and baseline provider skill.