Long-Run Effects of Temporary Incentives on Medical Care Productivity

62 Pages Posted: 20 Apr 2016

See all articles by Pablo A. Celhay

Pablo A. Celhay

University of Chicago

Paul J. Gertler

University of California, Berkeley - Haas School of Business; National Bureau of Economic Research (NBER)

Paula Ines Giovagnoli

Universidad Nacional de La Plata - Faculty of Economics

Christel Vermeersch

World Bank

Multiple version iconThere are 2 versions of this paper

Date Written: June 30, 2015

Abstract

The adoption of new clinical practice patterns by medical care providers is often challenging, even when the patterns are believed to be efficacious and profitable. This paper uses a randomized field experiment to examine the effects of temporary financial incentives paid to medical care clinics for the initiation of prenatal care in the first trimester of pregnancy. The rate of early initiation of prenatal care was 34 percent higher in the treatment group than in the control group while the incentives were being paid, and this effect persisted at least 15 months and likely 24 months or more after the incentives ended. These results are consistent with a model where the incentives enable providers to address the fixed costs of overcoming organizational inertia in innovation, and suggest that temporary incentives may be effective at motivating improvements in long-run provider performance at a substantially lower cost than permanent incentives.

Keywords: Reproductive Health, Health Service Management and Delivery, Health Economics & Finance, Health Care Services Industry

Suggested Citation

Celhay, Pablo A. and Gertler, Paul J. and Giovagnoli, Paula Ines and Vermeersch, Christel, Long-Run Effects of Temporary Incentives on Medical Care Productivity (June 30, 2015). World Bank Policy Research Working Paper No. 7348. Available at SSRN: https://ssrn.com/abstract=2625336

Pablo A. Celhay (Contact Author)

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

Paul J. Gertler

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States
510-642-1418 (Phone)
510-642-4700 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Paula Ines Giovagnoli

Universidad Nacional de La Plata - Faculty of Economics ( email )

1900 La Plata
Argentina

Christel Vermeersch

World Bank ( email )

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