Pay-for-performance—reimbursing health care providers based on the results they achieved with their patients as a way to improve quality and efficiency—has become a major component of health reforms in the United States, the United Kingdom, and other affluent countries. Although the approach has also become popular in the developing world, there has been little evaluation of its impact. A new study, released today as a Web First by Health Affairs, examines the effects of pay-for-performance, combined with capitation, in China’s largely rural Ningxia Province.

Between 2009 and 2012, authors Winnie Yip, Timothy Powell-Jackson, Wen Chen, Min Hu, Eduardo Fe, Mu Hu, Weiyan Jian, Ming Lu, Wei Han, and William C. Hsiao, in collaboration with the provincial government, conducted a matched-pair, cluster-randomized experiment to review that province’s primary care providers’ antibiotic prescribing practices, health spending, and several other factors. They found a near-15 percent reduction in antibiotic prescriptions and a small decline in total spending per visit to community clinics.

The authors note that the success of this experiment has motivated the government of Ningxia Province to expand this intervention to the entire province. “From a policy perspective, our study offers several additional valuable lessons,” they conclude. “Provider patterns of overprescribing and inappropriate prescribing cannot be changed overnight; nor can patient demand, for which antibiotics are synonymous with quality care. Provider payment reform probably needs to be accompanied by training for providers and health education for patients.”

Yip, Fe, and Han are affiliated with the Blavatnik School of Government, University of Oxford in Britain; Powell-Jackson is at the London School of Hygiene and Tropical Medicine; Chen and Min Hu are affiliated with Fudan University in Shanghai; Mu Hu, Jian, and Lu are with Peking University Health Science Center in Beijing; and Hsiao is affiliated at the Harvard School of Public Health in Boston.

The study, which was funded by the Bill & Melinda Gates Foundation and a European Commission Seventh Framework Programme research grant, will also appear in the March issue of Health Affairs.