Capitation combined with pay-for-performance improves antibiotic prescribing practices in rural China

Pay-for-performance in health care holds promise as a policy lever to improve the quality and efficiency of care. Although the approach has become increasingly popular in developing countries in recent years, most policy designs do not permit the rigorous evaluation of its impact. Thus, evidence of its effect is limited. In collaboration with the government of Ningxia Province, a predominantly rural area in northwest China, we conducted a matched-pair cluster-randomized experiment between 2009 and 2012 to evaluate the effects of capitation with pay-for-performance on primary care providers' antibiotic prescribing practices, health spending, outpatient visit volume, and patient satisfaction. We found that the intervention led to a reduction of approximately 15 percent in antibiotic prescriptions and a small reduction in total spending per visit to village posts-essentially, community health clinics. We found no effect on other outcomes. Our results suggest that capitation with pay-for-performance can improve drug prescribing practices by reducing overprescribing and inappropriate prescribing. Our study also shows that rigorous evaluations of health system interventions are feasible when conducted in close collaboration with the government.