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Pay-for-performance in health care holds promise as a policy lever to improve the quality and efficiency of care. Although the approach has become increasingly popular in developing countries in recent years, most policy designs do not permit the rigorous evaluation of its impact. Thus, evidence of its effect is limited. In collaboration with the government of Ningxia Province, a predominantly rural area in northwest China, we conducted a matched-pair cluster-randomized experiment between 2009 and 2012 to evaluate the effects of capitation with pay-for-performance on primary care providers' antibiotic prescribing practices, health spending, outpatient visit volume, and patient satisfaction. We found that the intervention led to a reduction of approximately 15 percent in antibiotic prescriptions and a small reduction in total spending per visit to village posts-essentially, community health clinics. We found no effect on other outcomes. Our results suggest that capitation with pay-for-performance can improve drug prescribing practices by reducing overprescribing and inappropriate prescribing. Our study also shows that rigorous evaluations of health system interventions are feasible when conducted in close collaboration with the government.

Jin Xu and colleagues describe the effects of the financing reforms of public hospitals and suggests steps to further progress towards equitable, efficient, and good quality care.

BackgroundSystems of governance play a key role in the operation and performance of health systems. In the past six decades, China has made great advances in strengthening its health system, most notably in establishing a health insurance system that enables residents of rural areas to achieve access to essential services. Although there have been several studies of rural health insurance schemes, these have focused on coverage and service utilization, while much less attention has been given to the role of governance in designing and implementing these schemes.MethodsInformation from publications and policy documents relevant to the development of two rural health insurance policies in China was obtained, analysed, and synthesise. 92 documents on CMS (Cooperative Medical Scheme) or NCMS (New Rural Cooperative Medical Scheme) from four databases searched were included. Data extraction and synthesis of the information were guided by a framework that drew on that developed by the WHO to describe health system governance and leadership.ResultsWe identified a series of governance practices that were supportive of progress, including the prioritisation by the central government of health system development and certain health policies within overall national development; strong government commitment combined with a hierarchal administrative system; clear policy goals coupled with the ability for local government to adopt policy measures that take account of local conditions; and the accumulation and use of the evidence generated from local practices. However these good practices were not seen in all governance domains. For example, poor collaboration between different government departments was shown to be a considerable challenge that undermined the operation of the insurance schemes.ConclusionsChina’s success in achieving scale up of CMS and NCMS has attracted considerable interest in many low and middle income countries (LMICs), especially with regard to the schemes’ designs, coverage, and funding mechanisms. However, this study demonstrates that health systems governance may be critical to enable the development and operation of such schemes. Given that many LMICs are expanding health financing system to cover populations in rural areas or the informal sectors, we argue that strengthening specific practices in each governance domain could inform the adaptation of these schemes to other settings.