Abstract
Abstract Can extrinsic incentives motivate faith-based healthcare providers? This paper challenges the finding that religious providers are intrinsically motivated to serve (poor) patients, and that extrinsic incentives may crowd-out such motivation. We use a unique panel of output and expenditure data from small faith-based nonprofit healthcare facilities in Uganda to estimate the effect of introducing performance-based financing. The output of the observed facilities is less than 50% of their potential. Performance-based financing increases output and efficiency robustly by at least 27%, with no apparent reduction in the perceived quality of services. Religious nonprofit healthcare providers may well be intrinsically motivated, but respond positively to extrinsic incentives. Whether working for god or not, incentives matter.
Highlights
Public healthcare systems in many developing countries suffer from severe dysfunctionalities and endemic absenteeism: among public health workers in Uganda, unauthorized absence from duty may be as high as 50% (Björkman & Svensson, 2009)
To gauge the effect of PBF on the efficiency of healthcare delivery, we use a range of output and input measurements collected by the Uganda Catholic Medical Bureau (UCMB) from all its health units, which amount to a panel spanning up to 246 mid-sized health units over a period of thirteen years
Using a panel of output and expenditure data from small healthcare facilities in Uganda, we estimate the contribution of performance-based financing towards achieving greater efficiency in faith-based nonprofit healthcare delivery
Summary
Public healthcare systems in many developing countries suffer from severe dysfunctionalities and endemic absenteeism: among public health workers in Uganda, unauthorized absence from duty may be as high as 50% (Björkman & Svensson, 2009). One way to improve the delivery of health services is to allow competition among different providers, regardless of their ownership status, guided by a principle of non-discrimination in the allocation of resources. This calls for a shift of responsibilities to the private and nonprofit sector. While for profit enterprises are growing rapidly, especially in urban areas, a large share of them is still faith-based: they are so called religious nonprofit organizations (RNPOs). In Uganda, 82% of all private nonprofit health facilities are coordinated by one of three faith-based organizations: the Uganda Protestant Medical Bureau (UPMB), the Uganda Catholic Medical Bureau (UCMB), and the Uganda Muslim Supreme Council (UMSC)—with a far greater share among.
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