Economic Issues in Human Resources for Health Policies

1
Economic Issues in Human Resources for Health
Policies

• www.africahrh.org
• Oslo, June 30, 2008

2
WB-NORAD HRH Program Overview

• HRH Program commenced end of 2006, with
  funding from NORAD and the BMGF, and supplemented
  by other sources
• Regional component
• Work closely with the International Community
• Foster the political will of Governments to
  address HRH
• Mobilize International Health Professionals to
  address HRH
• HRH Research and Analysis on SSA
• Country specific component
• Focus Efforts on Rwanda, Ethiopia, Zambia and
  Ghana
• Work closely with locally based Task Team Leaders
  and stakeholders
• Diagnose country needs within HRH
• Produce baseline information and analysis on HRH
• Assist develop national HRH strategies/policies
• Assist the costing and implementation of these
  strategies/policies

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QUESTIONS

• How many health workers are there, who are they,
  where are they?
• How much are health workers paid and how much
  should they be paid ? What motivates them to
  enter the labor market, and work in specific
  locations?
• How do health workers perform and what determines
  that performance ?
• What is the extent and pattern of migration of
  HRH ? What motivates health workers to migrate?
• What is the cost of scaling up? What are the
  fiscal constraints for scaling up the health
  workforce?
• What is the capacity of education institutions to
  scale up the production of qualified health
  workers? How much would it cost?

4
Analyzing HRH through a Labor Market Lens

• Focus on the labor market demand and supply
• Focus on the motivation and behavior of health
  workers
• Focus on monetary and non monetary compensation
  to influence health worker behavior
• Identifies key areas of market failure, and
  practical solutions to solve them

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Workforce versus Labor Markets
population increase, economic growth, aging,
increased aid for health..
6
Workforce needs and deficiencies..
7
..labor markets unemployment, shortage and
market clearing
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How many health workers are there, who are they,
where are they?

• What was measured?
• HRH Stock, Profiles, Distribution, Performance

• What tool was used?
• Health Facility Assessment
• HRH facility census
• Representative Survey
• HMIS

• What have we learned?
• Importance of a one-time cross-sectional
  approach to avoid double counting
• Combination with absenteeism and ghost workers
  study
• Institutionalization is often not possible given
  capacity constraints
• Careful design is crucial

• What are the findings?
• Government do not know how many workers they have
• Country and global decisions made on inaccurate
  data
• Significant undercounting of the private sector
• Essential demographics gender age are unknown

9
Health workers on payroll but not registered (to
be working) at facility in Zambia

Source Herbst et al, 2007

1 2005 population 9,038,000 (United Nations
Department of Economic and Social Affairs /
Population Division PRED Bank 4.0 Country
Profiles)
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What motivates health workers to enter the labor
market, and work in specific locations?

• What tool was used?
• -Focus groups, games
• -Labor market surveys cohort for new students
  and cross sectional for existing health workers
• -Contingent valuation

• What was measured?
• -Reasons for entering health sector
• -Longterm career plans
• -Monetization of rural incentives

• What are the findings?
• -Successful retention incentives are often more
  affordable than previously thought
• -Non monetary incentives are valued as much or
  more as monetary incentives
• -The right mix of monetary and non monetary
  incentives is country specific

• What have we learned?
• -Focus group produce very valid data so can
  substitute for more expensive surveys
• -Motivation study should need to be done as a
  preamble to policy
• -Cohort studies are a valuable, cost affective
  analytical tool

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What is the extent and pattern of migration and
what motivates health workers to migrate?

• What was measured and where?
• -Intention to migrate and reasons for migrating
  in Ghanaian nurses in Ghana and UK
• -Migration patterns and motivations of Ghanaian
  doctors

• What tool was used?
• -Focus Groups
• -Questionnaires

• What are the findings?
• -Many HCWs entered the sector with the intention
  to migrate
• -Nurses with high levels of altruism are more
  likely to remain in country
• -Academic schools are seen as better for
  migration than community-based schools

• What have we learned?
• -Characteristics of nurses who migrate are
  measurably different from those who stay

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MEDICAL BRAIN DRAIN IN GHANA 1991-2004
45
40
Benin
Burkina Faso
35
Cote d'Ivoire
Gambia, The
30
Ghana
GHANA
Guinea
25
Guinea-Bissau

Liberia
Mali
20
Mauritania
Niger
15
Nigeria
Senegal
10
Sierra Leone
Togo
5
0
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Year
Source Caglar et al, 2007
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How do health workers perform and what determines
that performance ?

• What was measured?
• -Presence
• -Productivity
• -Quality of services

• What tool was used?
• Health Facility Assessment
• Clinical Vignette
• HMIS
• Economic Experiment

• What are the findings?
• - Absenteism highly variable between countries
• - Large variations in productivity between
  regions, districts and facilities
• - Large variations in quality between public and
  private sector

• What have we learned?
• -Altruistic motivation likley to lead to better
  quality
• -Performance Based Financing likely to lead to
  improved results
• -Increasing wages across the board does not
  affect performance

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High rates of staff absenteeism among clinical
staff in Zambia
Source Oscar Picazo
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What is the capacity of education
institutionsto scale up the production of
qualified health workers?

• What was measured?
• -Multiple determinants of a school capacity
  financial, infrastructure, HR, management, etc
• -Quality of education

• What tool was used?
• Key informants
• Resource checklists
• Student tests

• What are the findings?
• -Data at the school level is poor
• -Failure rates are very high
• -Large numbers of private schools of nursing
• -Large variations in quality

• What have we learned?
• -Schools often underestimate their capacity to
  rapidly scale up
• -Clinical training is often the bottleneck for
  expansion
• -Low access to e-learning
• -Most governments will not be able to
• self-finance scaling up

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Drilling downthree examples

• Example 1 The fiscal issue
• Example 2 Wages and incentives to rural practice
  in Ethiopia
• Example 3 Decentralization and contracting for
  performance in Rwanda

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Beyond Wage Bill Ceilings the Impact of
Government Fiscal and Human Resource Management
Policies on the Health Workforce in the Public
Sector
Example 1 The fiscal issue
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Background

• Large gap between the workforce level needed to
  deliver essential services and current employment
  levels in developing countries
• Within the public sector a major issue is often
  lack of resources available to pay the salary
  costs of an expanded health workforce due, in
  turn, to restrictive policies on the overall
  public sector wage bill
• While the debate has been intense there is a lot
  of misinformation and little documented country
  experience

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Objectives

• Study focuses on two key questions
• How do government fiscal policies impact health
  workforce staffing levels in the public sector?
• Focus on impact of wage bill policies
• Within the current health wage bill envelope, do
  the existing HRH management policies and
  practices lead to strategic use of wage bill
  resources?
• Is the wage bill budget fully executed?
• Are health workers hired into the health
  workforce in a timely manner?
• Are newly hired staff allocated to areas where
  staff are needed most?
• Do the remuneration policies and terms of work in
  the public sector provide incentives for good
  health workforce outcomes?
• Methods
• Analysis of available administrative data and
  literature
• Four in depth country case studies Dominican
  Republic, Kenya, Rwanda, Zambia

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Wage Bill Budgeting
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• Zambia
• In 2002, the Government of Zambia implemented a
  hiring freeze as part of its program with the
  IMF, but explicitly excluded doctors and nurses.
  
• Kenya
• Wage policy measures will include flexibility
  to allow for recruitment of medical personnel in
  order to aim at reaching the optimum level of
  personnel for the health sector and to move
  toward achieving the MDGs.

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Wage Bill Budgeting
Source World Bank Government Wages and
Employment Dataset
23
Impact on the overall public sector wage bill of
changing staffing and wages in the health sector
Zambia
Sources World Bank calculations based on Zambia
Case Study, Zambia Education Public Expenditure
Review 2006
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Key HRH management policies and practices

• Creation of vacancies
• Often top down, not needs-based, no linked to
  geographic areas
• Recruitment of workers
• Takes too long (18 months in Kenya) to recruit
  new staff and to fill up vacancies
• Centrally managed
• Terms of service (mostly related to civil service
  constraints)
• Tenure
• Very little use of term contracts
• Remuneration
• Salary and non-performance based allowances
• Promotion and transfers
• Policies are not implemented
• Not carried out in a strategic way
• Sanctions
• Rare

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Lessons Learned

• Fiscal constraints are not relevant in all
  countries.
• Public sector management issues were a major
  constraint everywhere.

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Policy options

• De-link health sector from civil service
• Less stringent fiscal constraints for overall
  wage bill
• Increase MOH control of human resource management
• Improve negotiating power of the MOH
• Greater predictability of wage bill budgets and
  allocations

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Example 2 Labor market analysis
Wages and incentives to rural practice in Ethiopia
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Motivation

• Facts
• 27,000 people per physician
• Health workers concentrated in Addis Ababa
• Policy questions
• What is the cost of inducing rural labor supply?
• What are the long-term effects of rural postings?
• What are the effects and effectiveness of lottery
  allocation?

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Background, data and method

• Qualitative diagnostic study (2003)
• with different types of health workers and users
  of health services
• Survey with final year health students
  (2004-2007)
• 219 final year nursing students from 8 schools
  representing 16 of 2002/3 cohort
• 90 final year doctor students from all 3 medical
  faculties representing 49 of cohort
• Telephone follow-up (2005)
• Re-interview at place of work (2007)
• Household survey of health workers (2007)
• 29 hospitals and 68 health centers
• 219 doctors and 642 nurses

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1. Choosing between a rural and an urban post

• Low presence of health workers in rural areas
• in 2007 on average 30 of health workers work in
  a rural post (36 for nurses and 17 for doctors)
• Willingness to work in rural areas
• measured in both 2004 and 2007 using contingent
  valuation questions

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Contingent valuation question

• Imagine that when you finish your studies you
  get two jobs as a health worker in the public
  sector, one in Addis Ababa and one in a rural
  area 500 km from Addis Ababa. Both contracts are
  for at least 3 years. Your monthly salary for the
  job in Addis Ababa would be 700 Birr. Which job
  would you choose if your monthly salary for the
  rural job would be amount.

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Cumulative distribution for reservation wages for
rural (200km) and remote (500km) post
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Nurses reservation wage to work in a rural area
2004 and 2007
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• What explains a health workers willingness to
  work in a rural area?
• There is an obvious difference between rural and
  urban postings. Working in rural areas involves
  helping the poor... in urban areas, one can
  learn, have more income, have good schools for
  ones children.
• Health worker in Ethiopia

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• What explains the heterogeneity in health
  workers willingness to work in a rural area?
• 2004
• parents household welfare(-),
• urban back ground (-)
• intention to help the poor ()
• catholic () proxies school curriculum and
  culture
• 2007
• female (-)
• catholic () proxies school curriculum and
  culture

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2. Income
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Market pressure in Ethiopia..
Source World Bank- NORAD GATES HRH program
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Discrete Choice Experiment

• Job attributes
• Pay
• Location Urban vs Rural
• Housing
• Equipment conditions
• Service requirement after training (1 or 2 years)
• (Docs) Private sector activity permitted (0 or 1)
• (Nurses) Supervision

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Rural salary bonuses - doctors
Share willing to work in rural area
100
Superior housing
Basic housing improved equipment
Basic housing
50
Time
Baseline
Improved equipment
100
200
300
Rural salary bonus
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Rural salary bonuses - nurses
Share willing to work in rural area
100
Basic housing improved equipment
Basic housing
Improved equipment
Supervision
50
Superior housing
Time
Baseline
100
200
300
Rural salary bonus
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Cost and Benefits of Incentives Packages
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3. International migration

• More than 50 of health workers plan to emigrate
  abroad in the next two years
• 12 of nurses and 18 of doctors in 2004
• Those with lower job satisfaction are more likely
  to plan emigration abroad
• We also measure willingness to migrate abroad
  using contingent valuation

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The cost of retention

• B 6,000 and B10,500 fo 70 of nurses and 80 of
  doctors not to leave the county
• 500 to 600 increase in salary
• Doctors more inclined to leave the country than
  nurses

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Lessons learned

• a well designed package of financial and non
  financial incentives can be affordable in
  Ethiopia, leading a large proportion of health
  workers to work in rural areas
• housing and wage bonuses seem most effective in
  inducing doctors to serve in rural areas
  accelerated training less so
• facility equipment upgrade and wage bonuses are
  most effective for nurses on-the-job supervision
  less so.
• Moderate increases in wages (doubling or
  tripling) is not enough to stop migration
• lottery system puts high quality workers at a
  future disadvantage in the physician labor
  market

47
Example 3 HRH policy reforms for the MDGs

• Decentralization and contracting for
  performance in Rwanda

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Evolution of the overall wage bill in Rwanda

• Overall recurrent government expenditures on
  human resources, although stable relative to GDP,
  have suffered during the period to the benefit of
  other government recurrent expenditures
• The share of Minisante in total government
  recurrent HR expenditures has declined over the
  years
• The share of HR in Minisantes total recurrent
  expenditures has been in constant decline

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Characteristics of the Rwandan Response Model

• A Problem solving approach which links fiscal
  space creation to the resolution of sector
  problems
• Was facing 3 challenges
• Motivate health workers within Rwandas global
  economic constraints and Public Service
  Regulations
• Ensure that incentives used to motivate health
  workers would also correct incoherencies in the
  system, improve distribution and increase
  performance
• Increase access to the health system and improve
  outcomes
• Used three reforms/strategies to create fiscal
  space within the context of a relative
  contraction of the wage bill
• Decentralization
• Performance-Based Financing
• Incentives

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Reform I Decentralization

• Administrative, fiscal and financial
  decentralization has provided increasing sums of
  money to local levels of government and given
  them much flexibility by providing them with
  block grants (which could be used, among other
  things, to fund HRH) on top of the existing
  earmarked funds for HRH

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Impact of decentralization in HRH funding

• Focus of decentralization in the health sector
• Coverage and access to health insurance
• Distribution and access to health facilities
• Roles of different actors (local authorities,
  private sector, civil society and communities) in
  the delivery of health services
• Human resources and institutional capacity
• Financing of health services
• Following decentralization, districts could get
  funds from 3 public sources to finance HRH
• Earmarked funds for HRH
• HRH motivation funds and community contractual
  approach
• Block transfers (that can be used to fund HRH,
  among other things)

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IMIHIGO Performance based services for
territorial administration

• Contract for results attached to decentralized
  funds
• Contract between the President of the Republic
  and the district mayors and different local
  administration levels
• Key health indicators integrated in the contract
  (in 2007 ITNs, Mutuelles, FP, safe deliveries,
  hygiene..)
• Quartely review with Prime Minister, President
  attending twice a year

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Reform II Performance Based Financing (PBF)

• What is PBF?
• It is a contractual approach that buys results
  from health facilities instead of buying inputs
• Rather than being a substitute to the traditional
  input-based payment system, it complements it and
  the 2 approaches co-exist in Rwanda
• By topping up the salary of health personnel and
  linking these top-ups to performance, the PBF has
  unleashed innovative approaches to service
  delivery and has produced impressive health
  outcomes

54
National PBF model for Health Centers

• 16 Primary Health Care indicators, eg
• New Curative Consultation 0.27
• Delivery at the HC 3.63
• Completely vaccinated child 1.82
• 14 HIV/AIDS indicators, eg
• One Pregnant woman tested (PMTCT) 1.10
• One couple tested voluntarily (PMTCT) 1.10
• HIV women treated with NVP 1.10
• Separation of Functions between stakeholders
• Provides performance incentives to health workers

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Intermediate Results

• Remuneration increased by 40 to 80
• In the 23 participating districts, the following
  increases were reported
• 54 for ANC, Pyrimethamine/Sulfadoxine second
  dose
• 145 in Growth monitoring of children under 5 in
  the community
• 71 in Family Planning new users
• 90 in Family Planning users at the end of the
  month
• 31 in Institutional deliveries
• 160 in Referrals for Obstetric emergencies and,
• 10 in Emergency referrals

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Reform III Incentives for Health Professionals

• Decentralization of wages
• Facilities have the authority to hire and fire
• Facilities receive block grant from governmental
• People follow the money
• Retention of health personnel in rural areas with
  increased incentives
• Spectacular results rural health centers and
  hospitals are recruiting large numbers of
  personnel, including specialists
• Calibrated subsidy for rural areas

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Rwanda 2005-2008
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Lessons learned

• Fiscal decentralization can help increase
  resources for health facilities if well
  designed.. autonomy is essential
• Results Based Financing is a powerful mechanism
  to achieve the twin objective of increased
  performance and increased retention
• Combining public subsidy and private funding
  leads to increased remuneration and better
  adequacy with needs
• Delinking healh workers from the central wage
  bill and civil service is possible..and health
  workers are happy !

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CONCLUSION

• Supply policies have broadly failed .. Not only
  in Africa..
• Policy decisions are currently made in an
  evidence void
• Evidence base needs to be much more accessible

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What not to do ..

• Leave it to the private sector..
• Shoot in the dark just increase salaries
• Production mill .
• More money .. same performance..

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What to do ?

• A set of critical analytical intruments are
  essential to guide policy if to be effective
• Labor market analysis is indispensable for
  designing remuneration and incentives policies
• HRH policies need to be linked to public sector
  reform and fiscal policies

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So whats next ?

• Yes we can

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So whats next ?

• It is possible to design and implement innovative
  and forward looking HRH policies ..achieving
  results and building the health system of the
  21st century..
• In the context of IHP , RBFs present an
  unprecedented opportunity for
• Building Evidence based policies
• Integrating HRH in the broader agenda of Scaling
  Up for the MDGs.

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The Critical link between RBF and HRH Work
Programs

• RBF reforms offer an incredible opportunity to
  address major HRH inefficiencies including
  distribution, productivity, and performance
• RBF has already been used successfully in Rwanda,
  providing an effective response to the issue of
  staff retention and performance
• Several countries are interested in major reforms
  to health worker incentives as part of their
  grant
• For these to be successful, countries need to
  base the incentive schemes on empirical evidence
• Given the current weak evidence base there are
  no off the shelf solutions analytic
  groundwork is needed to design the HRH components
  of RBF grants
• The RBF grants also provide a unique opportunity
  a learning laboratory for implementing
  innovations in HRH.