The Impact of a Pay-for-Performance Scheme on Prescription Quality in Rural China: An Impact Evaluation

33 Pages Posted: 20 Apr 2016

See all articles by Xiaojie Sun

Xiaojie Sun

affiliation not provided to SSRN

Xiaoyun Liu

Peking University - China Center for Health Development Studies

Qiang Sun

Shandong University

Winnie Yip

University of Oxford - Blavatnik School of Government

Adam Wagstaff

World Bank - Development Research Group (DECRG)

Qingyue Menge

Peking University

Date Written: May 1, 2014

Abstract

In China, health care providers have traditionally been paid fee-for-service and overprescribing and high out-of-pocket spending are common. In this study, township health centers in two counties were assigned almost randomly to two groups: in one, fee-for-service was replaced by a global capitated budget; in the other, by a mix of global capitated budget and pay-for-performance. Performance captured inter alia "irrational" drug prescribing; 20 percent of the global capitated budget was withheld each quarter, points were deducted for failure to meet targets, and some of the withheld budget was returned in line with the points deducted. Outcomes included appropriate prescribing and prescription cost, data on which were obtained by digitizing prescriptions from a month just before the reform and from the same month a year later. Impacts were assessed via multivariate differences-in-differences with township health center fixed effects. To reduce bias from non-randomness in assignment, the sample was trimmed by coarsened exact matching. Pay-for-performance reduced inappropriate prescribing significantly and substantially in the county where the initial level was above the penalty threshold, but end-line rates were still appreciable; no effects were seen in the county where initial levels were around or below the threshold, or on out-of-pocket spending in either county.

Keywords: Health Monitoring & Evaluation, Health Systems Development & Reform, Health Law, Disease Control & Prevention, Population Policies

Suggested Citation

Sun, Xiaojie and Liu, Xiaoyun and Sun, Qiang and Yip, Winnie and Wagstaff, Adam and Menge, Qingyue, The Impact of a Pay-for-Performance Scheme on Prescription Quality in Rural China: An Impact Evaluation (May 1, 2014). World Bank Policy Research Working Paper No. 6892. Available at SSRN: https://ssrn.com/abstract=2443162

Xiaojie Sun (Contact Author)

affiliation not provided to SSRN

No Address Available

Xiaoyun Liu

Peking University - China Center for Health Development Studies

Beijing
China

Qiang Sun

Shandong University

27 Shanda Nanlu
South Rd.
Jinan, Shandong 250100
China

Winnie Yip

University of Oxford - Blavatnik School of Government ( email )

10 Merton St
Oxford, Oxfordshire OX1 4JJ
United Kingdom

Adam Wagstaff

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/awagstaff

Qingyue Menge

Peking University ( email )

No. 38 Xueyuan Road
Haidian District
Beijing, Beijing 100871
China

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