Philippines: Impact of Incentives and Information on Quality and Utilization in Primary Care

October 3, 2016

To improve access to primary health service, the Government of the Philippines has experimented with innovative techniques, including pay-for-performance incentives paid to rural health clinics and municipal health centers. Based on new evidence, the government is now interested in changing the scheme to pay the incentives directly to physicians. In this evaluation, researchers will measure the effectiveness of direct payments to physicians in raising health outcomes. The study will also look at whether health center quality ratings, combined with communicating information about health centers to the community, improves access to health facilities.

Research area: Health Systems and Service Delivery

Country: Philippines

Evaluation Sample: 240 Local Government Units

Timeline: 2013 - 2019

Intervention: Incentives, quality, information

Researchers: Junko Onishi, World Bank; Taejong Kim, Korean Development Institute; John Basa, PhilHealth

Partners:  PhilHealth; Korean Development Institute; World Bank; Ajou University


Policy Issue

Many countries are using pay-for-performance schemes---also known as performance-based payments--- to improve the quality and efficiency of healthcare services. Evidence for the effectiveness of these approaches has been mixed. More evidence is needed on the best ways to use incentives, and under what circumstances. For example, is it more effective to target health centers or physicians directly when setting up pay-for-performance programs? This evaluation will give development experts and governments more information on the uses of incentives and ways to structure them.


The Philippines has made considerable progress in health indicators over the past few decades. Infant mortality dropped by more than half between 1990 and 2006, while maternal mortality has also declined, albeit more slowly. The inadequacy of access to quality healthcare for the poor remains disconcerting, however, and progress is not fast enough to meet the 2015 Millennium Development Goals for health.

Philippines law mandates that municipal Local Government Units manage and deliver primary care services through rural health units and urban health centers. The Philippine National Health Insurance Corporation, known as PhilHealth, and the Department of Health have recently expanded the health insurance benefit coverage for the poor. As part of this, clinics receive payment incentives for enrolling families in primary care coverage. The government is looking at changing how payments are made, including whether it’s better to pay physicians directly, in addition to measuring the impact of providing information on how clinics use funds and their performance to communities and health administrators.

Photo: Kenneth Pornillos / World Bank

Intervention and Evaluation Details


The main intervention provides health centers with direct payment of 20 percent of total “per family” government funds. The government pays health facility staff directly through a dedicated trust fund administered by the Local Government Units.

In the second part of the intervention, PhilHealth will make information to service providers and the local government more readily available. For the financial component of the information, PhilHealth will inform the health centers when local governments received the “per family payments.” That information will be posted prominently in the health center so that the community is aware of the payment status. In addition, health facilities and local government executives will receive feedback on the “quality score” based on administrative data and regular assessment information obtained by regional PhilHealth officials. The score reflects facility infrastructure and supplies, adherence to clinical guidelines, client feedback, and service coverage.


The evaluation will examine whether revising the Philippines pay-for-performance healthcare scheme—by making financial and quality of care information more available—can ultimately increase community use of services and boost quality of care. The researchers will test whether ensuring professional fees actually reach health providers will increase their motivation to lead to increased use and quality of care.

Researchers will use an experimental design randomly assigning 240 Local Government Units into three treatment arms and a control arm, each consisting of 60 units. The first treatment group will receive payments paid directly to health providers; the second will receive the information intervention; and the third will receive both the direct pay to providers and the information. The control group will receive neither payments nor additional information.

Researchers will determine the impact of each intervention by comparing the difference in outcomes between treatment groups and the control group. Researchers will collect data about the community’s use of services at the beginning of the project and again, after two years of implementation. The study will also measure health facility service quality using a combination of instruments: reviews, facility observations by medical experts, and client satisfaction surveys and scorecards. Researchers will obtain cost data from PhilHealth databases, as well as information on local government resource allocation and disbursements from municipal governments.


Policy Impacts

This evaluation will help PhilHealth and the Government of the Philippines determine whether direct provider incentives and increased information improve community healthcare access and quality of care. The evaluation will also help the government determine which aspects of the program are most cost effective, thus helping prioritize interventions to scale up across the country. 

Encouraged by strong positive outcomes in recent evaluations, many low-income countries are considering pay-for-performance schemes to reach public health goals. This evaluation is expected to help policy makers in other low-income countries, particularly with decentralized health systems similar to those in the Philippines, who are either considering or implementing pay-for-performance schemes.