Performance based supply-side incentives in the context of health

system reform: A tale of two experiments in rural China

Winnie YipProfessor of Health Policy and Economics

Motivations• Contributing to Chinese health care reform:

– Rapid health expenditure growth– “Over” use of drugs and hi-tech diagnostics– A major cause: fee-for-service payment method

with a distorted price schedule

THE growth rate: 16.51% p.a.

GDP growth rate: 13.86% p.a.

Rapid Health Expenditure Growth

Motivations• Contributing to Chinese health care reform:

– Rapid health expenditure growth– “Over” use of drugs and hi-tech diagnostics– A major cause: fee-for-service payment method

with a distorted price schedule• Filling gaps in the p4p literature:

– Very limited experimental evidence– Still know very little about various design issues of

p4p

Design Issues• What to incentivize?

– Activities/volume– Quality: structure, process, outcome

• How to incentivize?– Reward versus penalty– Targets– Relative comparisons– Improvements from last period– % of income at risk

• Who to incentivize?– Organization or individual

Background• Two pilot experiments

– Ningxia– Shandong

• New Cooperative Medical Scheme (NCMS) – rural health insurance scheme, has traditionally paid providers using FFS

• Primary health care in rural areas: township health centres (THCs) and village clinics (VCs)

Drug prescriptions for common cold in Ningxia, 2009

Use of antibiotics >=2 antibiotics IV0%

10%

20%

30%

40%

50%

60%

Baseline condition: drug prescriptions, Shandong

0

10

20

30

40

50

60

70

80

THC VC

Incentive DesignNingxia• Capitated budget w/ p4p• Capitation rate includes

outpatient services at both THCs and VCs

• Capitated budget: capitate rate x pop in the catchment area

• Capitation rate: – Based on visits per

enrollee and expenditure per visit for THCs and VCs in the last two years

Shandong• Capitated budget w and w/o

p4p• Capitation rate includes

outpatient services at both THCs and VCs

• Capitated budget: capitate rate x pop in the catchment area

• Capitation rate: – Take 30% of total

premium for NCMS, divide by the number of enrolled population

Ningxia—Phase IItem Item Description Weight Score

Antibiotic prescription

Percentage of visits prescribed with antibiotics 150 Weight x (1 - % visits with antibiotics prescribed)

IV-antibiotic prescription

Among visits with antibiotics prescribed, percentage given via IV injection

150 Weight x (1 - % with IV injection among those prescribed antibiotics)

Falsifying visits

Percentage of visits with identical patient name and health problems repeated within one day

50 Weight x (1 - % of visits with identical patient name and health problems repeated within one day)

Completeness of visit record

Percentage of visit record that has at least one of the following incomplete: symptoms; diagnosis; drugs prescribed (types, dosage); exam/test prescribed (for township health centres); expenditure

50 Weight x (1 - % visit record deemed incomplete)

Patient satisfaction

Are you satisfied with the cleanliness of the clinic; are providers patient and careful in explaining your health problems; explain to you re medication; explain to you how to take medication; satisfied with the providers technical quality; waiting time

20 each Weight x (% response “1”)

TOTAL 500

ShandongQuality indicator Target and penalty

Qualified prescriptions T: 100%. P: For each pp < T, half a point was deducted.

Prescriptions containing 6 or more drugs

T: 10%. P: For each pp > T, half a point was deducted.

Divided prescriptions T: zero. P: Each occurrence results in a deduction of 1/10 of a point.

Prescriptions combined multiple antibiotics

For THCs, T is 10-15%For village clinics, T is 15-20%

Prescriptions using intravenous (IV) transfusion

For THCs, T is 25% for THC, 35% for village clinicsFor each pp > T, half a point was deducted.

Prescriptions using steroids For THCs, T is 10%; for village clinics, T is 20-22%For each pp>T, half a point was deducted.

Score on test of skill in diagnosing and treating chronic illnesses

T is 80 marks. For each mark<80, 1/5 or 1/10 of a point was deducted.

Patient satisfaction T: 80%P: each pp below T, 1/20 deducted

Environment and hygiene of the village clinic

Subjective evaluation if not satisfactory, 1/10 of a point was deducted.

Environment and hygiene of the THC

Same as above

P4P Incentives on THCsNingxia• 30% with-held• Tournament

– Each THC and VC receives a score

– THC score includes scores of its VCs

– Within each county, an avg score is calculated for all THCs. THCs that score at the avg take 30% of with-hold; those that score above avg receives >30% of with-hold; those that score < avg receives < 30% of with-held

Shandong• 20% with-held• Targets and penalty

– Each THC and VC receives a score

– THC scores include scores of its VCs

P4p Incentives on VCsNingxia• A VC specific capitated

budget is specified, and 30% of the budget is with-held for performance assessment

• Within each town, all VCs are subject to the tournament incentives

Shandong• Incentives between

THC and its VCs not specified

Town x First half year Second half year

Name 30% With-held amount

Actual payment based on QL score

QL scoreRelative town average

QL scoreRelative town average

VC1 12508 17387 434 1.51 436 0.98

VC2 8400 7879 210 0.73 485 1.09

VC3 29064 20675 117 0.41 462 1.04

VC4 8476 12607 412 1.43 433 0.97

VC5 18530 14035 149 0.52 444 1.00

VC6 17527 20820 385 1.34 445 1.00

VC7 9794 12287 378 1.32 391 0.88

Source of Data for p4p Assessment

Ningxia• Prescription:

– Management information system

– Universe of all visits/prescriptions

• Patient satisfaction: survey of patients

Shandong• Prescription:

– Random sample– THC: 50 per month– VC: 20 per month

• Patient satisfaction: survey of patients

Experimental DesignNingxia

• Pair-wise randomization: 14 pairs of towns (and all the village clinics within the town): whether the THC provided hospitalisation services; whether the THC was classified as a “centre”,; distance to the county seat; avg expenditure per OP visit; number of OP visits per year; number of VCs under its management; % agricultural population

• Lost one pair• Baseline balance

Shandong• Blocked

randomization by town and all VCs within a town

• Political interference• Baseline unbalanced

Estimation MethodNingxia

• End line comparison of:– Treatment :

capitated budget + p4p

– Control: FFS– Effects: capitated

budget + p4p

Shandong• Difference-in-difference

– Group A: FFS to Capitated budget + p4p

– Group B: FFS to Capitated budget

– Effects: p4p– Caveat: in practice,

group B also subject to 20% of with-held, except not told how they will be assessed

Findings

Ningxia: THC antibiotic prescription

0.130.15

0.170.18

0.200.22

0.240.25

0.270.29

0.310.32

0.340.36

0.380.39

0.410.43

0.450.46

0.480.50

0.520.53

0.550.57

0.590.61

0.620.64

0

1

2

3

4

5

6

7

x = Daily rates of the percentage of visits to a centrewith one or more antibiotics prescribed

InterventionControlFr

eque

ncy

(x)

0.190.20

0.210.23

0.240.25

0.260.28

0.290.30

0.310.32

0.340.35

0.360.37

0.380.40

0.410.42

0.430.44

0.460.47

0.480

2

4

6

8

10

12

x = Daily rates of the percentage of visits to a village postwith one or more antibiotics prescribed

InterventionControl

Freq

uenc

y (x

)Ningxia: VC antibiotic prescription

Control mean

Adjusted

Treatment effect (95% CI)

p valu

eNumber of patient visits per day in township health centres

All 37.3 -5.32 (-19.59, 8.95)0.45

0

Male 19.1 -2.37 (-9.03, 4.30)0.47

1

Female 19.4 -3.37 (-11.12, 4.39)0.38

0Number of patient visits per day in village posts

All9.7

-0.90 (-3.60, 1.80)0.49

8

Male5.7

-0.50 (-1.94, 0.94)0.48

0

Female5.2

-0.59 (-1.85, 0.67)0.34

2Patient satisfaction scoreTownship health centres 26.4 -0.03 (-0.69, 0.62)

0.913

Village posts 26.0 -0.10 (-0.63, 0.43)0.69

3

Causal effect of payment intervention on healthcare utilisation and patient satisfaction

Estimated impacts of P4P scheme – THCs, Shandong

N§ Marginal effect§

Marginal effect (%)*

Std error¶

Bootstrap adjusted p-value‡

Both counties combined

Cost1917 -7.001 -0.160 10.582 0.561

No. drugs in prescription

2410 -0.469 -0.126 0.304 0.120

2 or more drugs in prescription

2410 -0.071 -0.086 0.048 0.130

6 or more drugs in prescription

2410 -0.076 -0.316 0.048 0.126

Prescription contained antibiotic

2410 -0.050 -0.105 0.058 0.356

2 or more antibiotics2410 -0.076 -0.511 0.040 0.074

Intravenous injection2410 -0.096 -0.269 0.075 0.194

Prescription contained steroids

2410 -0.091 -0.531 0.050 0.078

Estimated impacts of P4P scheme – VCs, ShandongN§ Margina

l effect§

Marginal effect (%)*

Std error¶

Bootstrap adjusted p-value‡

Both counties combined

Cost 3273 -3.158 -0.107 4.694 0.535

No. drugs in prescription

3876 -0.280 -0.088 0.207 0.168

2 or more drugs in prescription

3876 -0.063 -0.079 0.054 0.256

6 or more drugs in prescription

3876 -0.026 -0.199 0.030 0.396

Prescription contained antibiotic

3873 -0.033 -0.056 0.074 0.635

2 or more antibiotics

3873 0.055 0.485 0.049 0.304

Intravenous injection

3874 -0.066 -0.184 0.060 0.284

Prescription contained steroids

3874 -0.034 -0.328 0.041 0.400

Conclusions• Capitation+p4p has some positive effect in reducing

inappropriate drug prescription, beyond removing drug profit margin

• Antibiotic prescription is still high• Gaining the government’s understanding of the value of the

project, and their respect/trust for the research team to maintain independence is important

• But,– Cannot isolate the effects of capitation and P4p separately– Requires setting up routine and automatically generated data for

performance measurement– P4p needs to be coupled with feedbacks– Effects on other outcome such as hypertension, diabetes remain to

be seen