Financial incentives and health provider behaviour: Evidence from a capitation policy in Ghana.

The capitation payment model has been used as a supply-side cost-containment tool in controlling physician behaviour. However, little is known regarding its effectiveness in controlling costs and discouraging use of low-value care. This study seeks to examine whether financial incentives in capitation influence provider behaviour, and if so, whether such behaviour compromises outcomes for inpatients with hypertension. To this end, we evaluate the effect on outpatient visits and inpatient outcomes of the introduction of capitation into a mixed payment system involving diagnosis-related groups and fee-for-service in the Ashanti region of Ghana. We use difference-in-differences with fixed effects and event study analysis of claims data over 48 months (2016-2019). We found that providers responded to financial incentives in capitation; outpatient visits were approximately 35% lower. However, we found no significant impact of capitation on inpatient outcomes; that is, the in-hospital death rate did not increase, and the length of hospital stay (which may be a rough indicator of the severity of illness) also did not increase. These findings indicate that patient health outcomes did not deteriorate. Evidence suggests that the observed reduction in outpatient visits may be in unnecessary or low-value visits, especially at lower levels of the healthcare system.

Competition and quality of care under regulated fees: evidence from Ghana.

BACKGROUND: How competition affects the quality of care is still not well understood empirically because of limited and mixed results. This study examined whether competition leads to higher or lower quality health outcomes in Ghana. METHODS: We used administrative claims data of hypertension patients for 2017 - 2019 (36 months), and an instrumental variable method to examine the effect of competition, measured as an increase in district doctor-to-population ratio on hospital-level ambulatory care sensitive condition hospitalization and in-hospital death rates. RESULTS: Overall, we found that an increase in doctor density improves the quality of care for hypertension patients in Ghana. That is, when there are more doctors, fewer patients are hospitalized, and the risk of in-hospital deaths decreases. This result is robust to analyses at the individual and district population levels for ambulatory care sensitive hospitalizations rate. CONCLUSIONS: Our findings suggest that in the presence of physician-induced demand, competition can lead to improvement in the quality of care, possibly through improved access to healthcare and increased physician time and contact per patient. Future health policies need to consider possible welfare benefits of induced medical services and training more doctors.

Competition and physician-induced demand in a healthcare market with regulated price: evidence from Ghana.

Using panel data of administrative claims spanning 36 months (2017-2019) and an instrumental variable method, this study examines whether physician-induced demand for hypertension disease care exists in Ghana's healthcare system where price is regulated, and there is no co-payment. We find that an increase in competition-measured as a high doctor-to-population ratio at the district level-leads to an increase in the number of physician visits, suggesting physician-induced demand exists, and that effects are greater for large hospitals and public health providers. This result is further supported by alternative measures and specifications showing that physicians' revenue from medication and gross revenue increase as the physician density increases. These pattern suggest that physicians in high density areas, faced with a decrease in number of patients per physician, make up for the decline in income by inducing more patient visits.