Multitasking and Heterogeneous Treatment Effects in Pay-for-Performance in Health Care: Evidence from Rwanda

Performance-based contracting is particularly challenging in health care, where multiple agents, information asymmetries and other market failures compound the critical contracting concern of multitasking. As performance-based contracting grows in developing countries, it is critical to better understand not only intended program impacts on rewarded outcomes, but also unintended program impacts such as multitasking and heterogeneous program effects in order to guide program design and scale-up. We use two waves of data from the Rwanda Demographic and Health Surveys collected before and after the quasi-randomized roll-out of Rwanda’s national pay-for-performance (P4P) program to analyze impacts on utilization of healthcare services, health outcomes and unintended consequences of P4P. We find that P4P improved some rewarded services, as well as some services that were not directly rewarded, but had no statistically significant impact on health outcomes. We do not find evidence that clearly suggests multitasking. We find that program effects vary by baseline levels of facility quality, with most improvements seen in the medium quality tier.