Despite China’s rapid economic development, prevalence rates of iron deficiency anemia among children in China’s poorest rural areas range between 25% and 60% - implying more than 10 million affected children (MoH, MoST and NBS 2004, Chen et al. 2005, Wang 2007). Anemia leads to compromised ability to learn and poor physical growth, which may impair children’s ability to perform in school and ultimately result in retarded cognitive, motor, and academic ability. Consequently, childhood anemia is strongly (negatively) correlated with educational outcomes, such as grades, attendance and attainment (Bobonis 2004, Stoltzfus 2001, Halterman et al. 2001). Anemia may also therefore limit children’s opportunities for social and economic mobility and be an important contributor to the intergenerational transmission of poverty (Bobonis 2004).
If the problem is so great, why have few corrective steps been taken when inexpensive, highly efficacious and accessible interventions exist? Misalignment between supplier incentives and the ultimate social objective of good population health may be an important explanation for this phenomenon. Performance pay by rewarding providers for achieving health improvement without specifying how it should be done also creates much stronger incentives for creativity and innovation. Doing so returns decision-making authority to local providers, allowing them to fully utilize their superior knowledge of what is likely to work (and not to work) in local settings.
Our research presents evidence on the effectiveness of rewarding providers for better health outcomes by studying the impact of financial incentives for primary school principals on anemia reduction among students in rural China.
We aim to determine whether performance pay incentives for providers lead to better health outcomes.
|Anemia compromises the energy and attention needed for effective learning. How will the local providers be motivated to help these children?|
Sampling and Randomization
We randomly selected rural Chinese primary schools in Ningxia and Qinghai, two provinces with high anemia rates. All participants were fourth or fifth grade students. We then randomly assigned study schools to one of three experimental arms.
We obtained hemoglobin concentration measurements from the students at baseline and follow-up to determine whether the interventions might make any difference in reducing anemia and affecting behavioral responses.
Larger Changes in Hemoglobin Concentrations and Dependence on Test Score Incentives in the Subsidy and Incentive Groups than in Control
Different Behavioral Responses to Interventions Depend to Some Extent on Behavior Type
|Supplements used by some school principals to combat anemia|
Significance and Contributions
We report evidence that primary school principals with incentives for good test scores make better use of subsidies to reduce anemia – and direct rewards for anemia reduction nearly doubles their impact. Understanding financial incentives’ synergies with motives and incentives already present may enable them to produce substantial population health gains.