financial incentives

costs is well known from high-income countries. When PBF programs are being scaled up, they should therefore be designed to counter both the underuse of needed care and the provision of nonindicated care, with adjustments over time toward a greater focus on the latter to ensure the continued sustainability and cost efficiency of delivering effective coverage for all.

In this context, the chapter briefly discusses to what extent the quality measurement methods introduced in chapter 3 may be used in designing effective performance incentives for providers. Such incentives should counteract both the underprovision of needed care and the overprovision of nonindicated care. The chapter argues that measuring effective coverage and quality of care should become an integral part of both health policy research and any health system reform, and quality measurement should be built into health data collection systems, with an eye to supporting health financing initiatives as well as continued policy research to expand the evidence base.

Second, the chapter discusses the timing and design of evaluations that aim to inform policy makers on the health system impacts of PBF programs at scale. As PBF reaches scale, it is important to move beyond proof-of-concept studies based on time-limited pilots, toward understanding PBF’s full impact on the health system. For example, even in national-level pilots, there might sometimes be insufficient capacity building on the ground due to a project-based approach that is not always conducive to decentralized implementation and management. Given that PBF approaches influence the entire health system, a criticism of impact evaluations of PBF pilots is that they fail to assess the entirety of the impacts generated. The chapter therefore also discusses the timing and design of evaluations that aim to inform policy makers on the health system impacts of PBF programs at scale.

Provision of nonindicated treatment in the context of financial incentives

Many times, low quality of care leads not only to the undersupply of needed treatment, but also to the provision of nonindicated or “mismatched” treatment; that is, the patient receives treatment other than what is needed, or in excess of what is needed. The unnecessary prescription and supply of medications and diagnostics are increasingly recognized as

affecting not only high-income countries, but also LMICs (Brownlee et al. 2017; Busfield 2015; Holloway et al. 2013; WHO 2009).

While the main priority of any quality of care initiative in LMICs is typically to reduce undertreatment and expand coverage, there are several reasons why policy makers and researchers should not lose sight of overprovision in these settings. For one, the evidence summarized below shows that nonindicated care often occurs alongside insufficient care. Thus, when budgets are tight and human capital and materials are in short supply, there is a real concern that providing unnecessary care in one part of the health care system diverts resources away from patients elsewhere who urgently need them. Preventing unnecessary treatment may therefore directly contribute to reducing underuse. In addition to wasting resources, nonindicated care may also cause medical harm: to the patients themselves, by causing side effects, drug interactions, or trauma from invasive procedures, and to the public at large, by furthering resistant pathogens. Indeed, the World Health Organization (WHO) has declared antimicrobial resistance “one of the top 10 global public health threats facing humanity” (WHO 2020). Last, the chapter argues that preexisting incentives to supply nonindicated care may increase as countries become wealthier and their health systems less budget constrained, and these drivers may be reinforced by pay-for-performance schemes that reward the quantity of care without verifying whether such care is needed.

The problem of nonindicated or overly expensive treatment may be more familiar, and perhaps considered more pressing, in high-income countries, but it is pervasive across health care systems and a widespread problem for many conditions and medications. As early as 2009, the WHO compiled a database of 679 studies published from 1990 to 2006 reporting on common medicine use indicators in 97 countries. The findings were summarized in a Fact Book (WHO 2009) that was later updated to include studies until 2009 (Holloway et al. 2013). Most of the cited studies focus on public sector care,2 where it might be expected that the minimum standards for the availability of diagnostic tools, provider training, and medicine use would be poor. For example, over 40 percent of pneumonia cases were not treated with an antibiotic (as they should be in almost all cases), while nearly 50 percent of upper respiratory tract infections received one (constituting nonindicated care). Analogously, irrelevant care was provided for malaria and diarrhea, most often simultaneously with substantial undertreatment. Overall, 40 percent or fewer cases were treated according to the standard guidelines (Holloway et al. 2013).