Putting a Band-Aid on a Corpse: Incentives for Nurses in the Indian Public Health Care System

TLDR

The public Indian health care system suffers from high staff absenteeism, low provider effort, and limited utilization as patients favor private alternatives. This study reports on an experiment conducted with a district administration and an NGO to evaluate incentive mechanisms for nurses. The NGO recorded nurses’ presence at subcenters and aid‑posts, and the government imposed penalties on the most delinquent staff. The monitoring system initially proved effective and showed nurses responded to financial incentives, but after a few months the local administration undermined the scheme by permitting more exempt days, rendering the program ineffective after eighteen months.

Abstract

The public Indian health care system is plagued by high staff absence, low effort by providers, and limited use by potential beneficiaries who prefer private alternatives. This artice reports the results of an experiment carried out with a district administration and a nongovernmental organization (NGO). The presence of government nurses in government public health facilities (subcenters and aid-posts) was recorded by the NGO, and the government took steps to punish the worst delinquents. Initially, the monitoring system was extremely effective. This shows that nurses are responsive to financial incentives. But after a few months, the local health administration appears to have undermined the scheme from the inside by letting the nurses claim an increasing number of "exempt days. "Eighteen months after its inception, the program had become completely ineffective.