Outcome Versus Service Based Payment in Health Care: Lessons from African Traditional Healers / Kenneth Leonard, Joshua Graff Zivin.

Format:

Book

Author/Creator:

Leonard, Kenneth.

Contributor:

National Bureau of Economic Research.

Graff Zivin, Joshua.

Series:

Working Paper Series (National Bureau of Economic Research) no. w9797.

NBER working paper series no. w9797

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Outcome Versus Service Based Payment in Health Care

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2003.

Summary:

We compare the more common physician compensation method of fee-for-service to the less common payment-for-outcomes method. This paper combines an investigation of the theoretical properties of both of these payment regimes with a unique data set from rural Cameroon in which patients can choose between outcome and service based payments. We show that consideration of the role of patient effort in the production of health leads to important differences in the performance of these contracts. Theory and empirical evidence show that when illnesses require (or are responsive to) large amounts of both patient and practitioner effort, outcome based payment schemes are superior to effort based schemes. The traditional healer -- a practitioner who offers health services on an outcome-contingent basis -- is advanced as an important example of how patient effort can be better understood and tapped in health care.

Notes:

Print version record

June 2003.