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Cambodia's Experienc IMPACT OF THE PERFORMANCE-BASED PAYMENTS ON HEALTH WORKERS IN CONTRACTING OUT GOVERNMENT HEALTH SERVICES: CAMBODIA’S EXPERIENCE KIMIKO ABE A thesis submitted in partial fulfilment of the requirements for the degree of Doctor of Philosophy QUEEN MARGARET UNIVERSITY 2014 Abstract Contracting out government health services has been increasing in low and middle income countries (LMICs) and highly valued in improving health service delivery. In some cases, government health workers have been paid performance-based payments; such payments have been quoted to contribute to the achievement. However, impacts of the payments on the health workers’ total income including income from their private practice and the government salaries have been little studied, while their private practice have posed serious issues in the service delivery with the constraint from low government salaries. The impacts at the household level have been unstudied. This study investigated these impacts of the payments paid to the government health workers in a project for contracting out district health service delivery to international NGOs in rural Cambodia. In this study, key informant interviews elaborated payment mechanism and other factors in the incentive environment; household income and expenditure surveys of the health workers’ households ascertained their incomes and their households’ incomes and expenditures and compared these data between the two tyes of distrctircts (N=250); a mini-survey about payment mechanism at the subcontractor-level deepened understanding of important factors on the impacts; regression analyses of the incomes or expenditures confirmed the impacts of payments in relative to other possible influential factors on incomes and expenditures. The payments associated with the contracting settings including the performance-based payments were found to increase the heatlh workers’ incomes and their households’ incomes reasonably sufficiently, while non-recipients’ whose income mostly consisted of private practice income. The result of regression analyses supported the higher incomes. Therefore, this study tentatively argued,with further support from the interview result that transfers of the health workers’ labour supply from the private to government sector were brought about by the payments, i.e., labour supply increase in the government sector and reduction of dual practice. III Acknowledgment First of all, I am extremely grateful to my supervisors; Ms. Suzanne Fustukian, Senior Lecturer, and Dr. Barbara McPake, Professor of Institute for International Health & Development (IIHD), to Queen Margaret University (QMU) for their valuable advice and supervision. I deeply appreciate their extensive support, encouragement and perceptive comments during the course of my PhD study. I would also like to thank all members of IIHD. I am particularly grateful to Ms. Oonagh O’Brien, Dr. Jean Robson, Dr. Bregje de Kok, and Dr. Carol Eyber. Thanks to Ms. Kyoko Jardine and Ms. Janice Burr at IIHD and to the staff of IS Help Desk and of Learning Resource Center of QMU who always provided support to me about IS issues and helped obtain the necessary books and articles. I am also grateful to all of my fellow PhD students of IIHD, particularly, Dr. Anuj Kapilashrami and Mr. Edson Araujo. I am also thankful to Dr. Robert Rush and for his suggestions for my statistical analyses. I particularly wish to thank Dr Oum Sophal, Rector, University of Medical Science, Cambodia, for his generous support to my fieldwork in Cambodia. I am also grateful Mr. Suon Seng, Mr. Lim Soviet and the surveyors of my fieldwork for their work in difficult conditions in rural Cambodia. I am grateful to Dr. Hiromi Obara and Dr. Reiko Tsuyuoka for sharing their knowledge and experiences about the health sector development in Cambodia. They also provide me with accommodation in Cambodia. Whilst on my PhD study, Professor Azumi Tsuge of Meiji Gakuin University provided me with three-year teaching opportunity at the university and Dr. Obara and Dr. Noriko Fujiko provided opportunities to participate in a health develop project and a research project in Cambodia. These opportunities deepened my insights and increased background knowledge about my PhD study. I wish to thank for these three persons. My friends in U.K., Japan, and other countries including: Mr. Karl Stern, Ms. Pamela Ogg, Dr. Vicky (Vassiliki) Karkou, Dr. Sue Oliver, Mr. Richard Walker, IV Dr. Rie Makita and Dr. Christina Rundi, supported me with their friendship and encouragements which helped me survive the process. Last but not least, I appreciate the support of my husband, Masaaki Abe for his understanding, patience, and encouragement. V Abbreviations ADB Asian Development Bank CEDAC Cambodian Center for Study and Development in Cambodia COD Operational District Contracted out CSES Cambodian Socio-Economic Survey DFID Department For International Development DHS Demographic and Health Survey Human Immune deficiency Virus/Acquired immune HIV/AIDS deficiency syndrome HNI HealthNet International HRH Human Resources for Health JICA Japan International Cooperation Agency LIS Luxembourg Income Study LMIC Low and middle income countries LSMS Living Standard Measurement Surveys MOD Operational District managed under Ministry of Health MOH Ministry of Health, Cambodia MOP Ministry of Planning, Cambodia NGO Non Government Organisation NIPH National Institute of Public Health NIS National Institute of Statistics OD Operational District RHAC Reproductive Health Association of Cambodia SRC Swiss Red Cross UNDP United Nations Development Programme UNICEF United Nation’s Children’s Fund UNIFEM United Nations Development Fund for Women VI Table of Content Chapter 1 Introduction, Context and Background of This Study .......................... 1 1.1. Context ................................................................................................................... 1 1.1.1 Performance-based incentives in contracting out health services in international health ....................................................................... 1 1.1.2 Cambodian Contracting out Health Services ................................................... 3 1.2 Objective of this study ............................................................................................ 4 1.2.1 Objectives ........................................................................................................ 4 1.2.2 Research questions ........................................................................................... 5 1.3 Outline of this thesis ............................................................................................... 5 Chapter 2 Literature Review ................................................................................. 7 2.1 Conceptual framework ............................................................................................ 7 2.2 Incentives .............................................................................................................. 11 2.2.1 Incentives and the principal-agent relationship .............................................. 11 2.2.2 Work motivation ............................................................................................. 12 2.3 Incentive environment in the government health sector in LMICs ....................... 13 2.3.1 Characteristics and issues ............................................................................... 13 2.3.2 Incentives to health workers in LMICs .......................................................... 15 2.4 Contracting out in health sectors in LMICs .......................................................... 21 2.4.1 Theory of contracting out and applications .................................................... 21 2.4.2 Performance-based payments in contracting out ........................................... 24 2.5 Dual practice ......................................................................................................... 25 2.5.1 Consequences, factors which bring about dual practice ................................ 25 2.5.2 Dual practice as corruption ............................................................................ 28 2.5.3 Labour supply of health workers between the two sectors ............................ 29 2.5.4 Financial incentives to reduce or stop dual practice ...................................... 30 2.6 Exploring the impact of performance-based payments in LMICs ........................ 30 2.6.1 Incomes health workers in the government and private sectors..................... 30 2.6.2 Health workers’ household income ................................................................ 32 2.6.3 Household Expenditure .................................................................................. 34 VII 2.7 Knowledge gap about impact of performance-based payments in contracting out in LMICs ............................................................................................................... 35 2.7.1 Incentive environment .................................................................................... 36 2.7.2 Health workers’ different income, their households’ income and expenditures ............................................................................................................ 36 Chapter 3 Cambodia - the context of contracting out and past contracting projects ..........................................................................................................................
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