UCLA

BACKGROUND: Should health systems invest more in access to care by expanding insurance coverage or in health care services including improving the quality of care? Comparing these options experimentally would shed light on the impact and cost-effectiveness of these strategies. METHODS: The Quality Improvement Demonstration Study (QIDS) was a randomized policy experiment conducted across 30 districts in the Philippines. The study had a control group and two policy intervention groups intended to improve the health of young children. The demand-side intervention in QIDS was universal health insurance coverage (UHC) for children aged 5 years or younger, and a supply-side intervention, a pay-for-performance (P4P) bonus for all providers who met pre-determined quality levels. In this paper, we compare the impacts of these policies from the QIDS experiment on childhood wasting by calculating DALYs averted per US$spent. RESULTS: The direct per capita costs to implement UHC and P4P are US$4.08 and US$1.98 higher, respectively, compared to control. DALYs due to wasting were reduced by 334,862 in UHC and 1,073,185 in P4P. When adjustments are made for the efficiency of higher quality, the DALYS averted per US$ spent is similar in the two arms, 1.56 and 1.58 for UHC and P4P, respectively. Since the P4P quality improvements touches all patients seen by qualifying providers (32% in UHC versus 100% in P4P), there is a larger reduction in DALYs. With similar programmatic costs for either intervention, in this study, each US$spent under P4P yielded 1.52 DALYs averted compared to the standard program, while UHC yielded only a 0.50 DALY reduction. CONCLUSION: P4P had a greater impact and was more cost-effective compared to UHC as measured by DALYs averted. While expanded insurance benefit ceilings affected only those who are covered, P4P incentivizes practice quality improvement regardless of whether children are insured or uninsured.