Money for nothing: The dire straits of medical practice in Delhi, India

Abstract

The quality of medical care received by patients varies for two reasons: differences in doctors' competence or differences in doctors' practice. Using medical vignettes, we evaluated competence for a sample of doctors in Delhi. One month later, we observed the same doctors in their practice. We find three patterns in the data. First, doctors do less than what they know they should do. Second, the more competent the doctor, the greater the effort exerted. Third, competence and practice diverge in different ways in the public and private sectors. Urban India pays a lot of “Money for Nothing”: in the private sector there is a lot of expenditure on unnecessary drugs. In the public sector, education subsidies and salary payments translate into little (and in small clinics, very little) effort and care. Provider training has a small impact on the actual quality of advice; under the circumstances, awareness campaigns to create a more informed clientele may be the best option.

Introduction

The quality of medical care is widely perceived to be of major importance to a population's health status (Cutler, 2003); it is also widely perceived to be very low in many low-income countries. Yet, it is generally an ill-defined concept. Discovering the main determinants of quality as measured by the nature of the advice and treatment actually given to patients is important for several reasons. If the problem of poor advice is mostly due to health-care providers not knowing what to do, then the appropriate policy response would be to improve the training and updating of their skills.¹ If the problem is a result of the incentives that they face—for example, the contrast of “high power” incentives in the form of fee-for-service as in the private sector with “low-power” incentives in the form of salaries as in the public sector—this requires a very different policy response that takes the nature of these incentives seriously and would not necessarily include training at all.

This is the second of two papers trying to define and analyze the quality of medical care in urban India that stem from a study of medical providers in seven neighborhoods of Delhi. The research project was completed in two stages. In the first stage we interviewed 205 doctors using “vignettes” or hypothetical medical conditions (Das and Hammer, 2005a). In our first paper we derived a measure of “competence” from these interviews and looked at patterns across qualifications and practice in different venues. Our sample covered doctors who were medical school graduates with an MBBS degree to a wide variety of other providers, some with no training at all. Treatment venues were private practices, public hospitals (among the most prestigious in the country) and public primary care clinics. Essentially, we looked at what different providers knew.

In the second stage of the research project, interviewers sat with the same doctors for a whole day, recording how many patients they saw, what symptoms the patients presented with, how many questions they asked, how much time they spent and what they prescribed. In other words, we measured what they did. In this paper we combine the two types of data to understand the relationship between what doctors know and what they do.

That there might be a distinct difference between what providers know and what they do is best illustrated by the following excerpt of an interview between one of the authors and a doctor in the private sector, during the pre-test stage of the study. The doctor was talking about illnesses in the neighborhood where he practices:

• Dr. S.: “Yes, there is a lot of diarrhea and dysentery in this locality—what can they do as well? The water is dirty and people do not know to boil it—that's why their children are always falling sick.”

• DAS: “So, what do you do for children with diarrhea ?”

• Dr. S.: “What can we do? The usual things—we tell the mother to give water with salt and sugar to the baby and then also give some medicines.”

• DAS: “Such as ?”

• Dr.S.: “The usual—metrogyl ( metronidazole), loperamide (an anticholinergic), Furoxone (furazolidone).”

• DAS: “But isn’t ORS enough ?”

• Dr.S.: “Of course, the WHO and others keep saying that we should only give ORS. But if I tell the mother that she should go home and only give the child water with salt and sugar, she will never come back to me; she will only go to the next doctor who will give her all the medicines and then she will think that he is better than me.”

Despite such treatment patterns, many people choose to pay private providers and far fewer than half go to public facilities even though they are supposed to be free. This is often because of perceptions of poor treatment (clinically and in terms of courtesy), high absentee rates and lack of attention among public sector providers (Das and Hammer, 2005a, validate the low competence of providers in public primary clinics, Chaudhury and Hammer, 2005 and Banerjee et. al., 2004 document absenteeism in health centers in Bangladesh and Rajasthan respectively and Chaudhury et al., 2006, compare international absence rates in public clinics). Here, we examine the effect of incentive structures, knowledge and the interaction between the two for how providers actually behave and the quality of advice they give.

We are particularly concerned with comparisons between public and private providers. We are also interested in comparing public doctors based in major hospitals with those in smaller clinics; in the earlier paper, we found these two groups to be quite different in terms of “competence”. Further, given concerns in India that patients are “over-medicated”, we also deal with the issue of how many and what types of medicines are usually prescribed (“poly-pharmacy” and overuse of antibiotics), again, with particular emphasis on the contrast between public and private sectors.

Our basic conclusions indicate that patients spend a great deal of money for nothing on medical care. The average interaction with a doctor in our sample is governed by the “Rule of three.” The patient arrives 3 days after becoming sick, the doctor spends 3.8 min and asks 3.2 questions after which the patient leaves with 2.6 different medicines, 0.5 of which are antibiotics. With no diagnostics prior to the consultation, this is all the medical care she receives. The level of attention is low, relative to other countries and relative to what doctors had told us they would do faced with similar patients in the vignettes administered previously. On average, doctors treat patients differently from how they say they would treat them. Depending on whether we are discussing the public or the private sector this is for two very different reasons.

• Private sector providers are very responsive to patient's expectations. For poorer patients, the quality of advice is limited by the low competence of the provider, and such patients spend a fair amount of money for nothing in terms of low-value advice and unnecessary drugs. Wealthier patients receive better advice, both because they see more competent providers and because these providers put in greater effort. However, they also spend a fair amount of money for nothing in the form of unnecessary drugs that the provider knows to be unnecessary on the basis of the vignettes.

• Public providers exert much less effort, relative to private providers and relative to what they know to do on the basis of the vignettes. They represent another kind of spending money for nothing. Despite the subsidy to their education and their salary (over 80% of the government's health budget), a great deal of the public's money is spent for (essentially) nothing, due to the very low effort, particularly in small clinics.

Our other main results are

• Doctors in public hospitals exert less effort than private providers but substantially more than those in small public clinics. Further, they are less likely to prescribe excessively and therefore are probably no worse than private MBBS providers, and very possibly better. Unfortunately, poor people almost never see doctors in public hospitals. Over a 2-year period, based on a simultaneous survey in which households were followed, of 2183 visits to health providers among the poorest tercile, less than 12% were to public hospitals.

• Effort and competence are complements in practice. That is, more competent providers spend more time with patients, ask more questions and perform more examinations. Less competent providers deliver poorer health care because of the direct effects of lower competence and the indirect effects of lower effort.

• Better providers tend to locate in better neighborhoods and the quality of care varies much less within neighborhoods across types of practitioners and patients than between richer and poorer neighborhoods.

The concentration of more competent providers in richer neighborhoods, combined with the low use of public hospitals imply that the poor in the city are particularly under-served for several reasons: (1) competence among the private sector providers they visit is low; (2) they receive worse medical care both due to the direct effects of lower competence and the indirect effects of lower effort; and (3) lower effort in the public sector offsets the benefits of somewhat higher competence. The poor receive low-quality care from the private sector because doctors do not know much and low-quality care from the public sector because doctors do not do much. Indeed, in poor neighborhoods, despite the lower competence of providers in the private sector, the quality of advice that patients receive compares favorably to the public sector: Households in poor areas are better off visiting less qualified private providers than more qualified public doctors.

Both occupational selection (doctors with higher effort costs choose the public sector) and poor incentives could explain the difference between the public and private sector. To the extent that it is the latter, the results suggest that improved medical services, at least for poor people, are more a function of incentives in the public sector rather than low competence in the private sector. India, typically for poor countries, has no payment incentives for its public sector doctors—richer countries do not pay primary health care physicians through a fixed salary.² Even when the system is publicly financed, incentives are in place to make remuneration dependent on the number of patients seen. For the private sector, problems with implementing existing regulations severely limit the number of direct policy interventions. The solution is more likely to come from improving information to consumers and reducing the demand for extensive, inappropriate treatment.

The literature on incentives and performance for doctors includes studies in high-income countries (see the review by Gosden et al., 2000, on performance under capitation and fee-for-service regimes) that typically focus on a set of doctors under a common management scheme. Fewer studies relate the performance of specific doctors to the incentives they face. While this may seem innocuous, recent contributions suggest that moral hazard in teams could lead to better results with institutional rather than personal incentives (Gaynor et al., 2004).

Another part of the literature examines the link between competence and effort in high-income countries and shows that performance in vignettes is different from that in practice for a sample of 34 doctors in the Netherlands (Rethans et al., 1991). However, given the sample size, they do not examine the complementarity (or lack thereof ) between effort and competence or the impact of incentives on this gap.

Our work, along with Leonard et al. (2005) and Barber and Gertler (2005), represent new research on the quality of health care using vignettes in low-income countries. In many demand studies, the “quality” of a health clinic is measured by the presence or absence of pharmaceuticals in stock or other easily observed physical characteristics of the facility (Collier et al., 2003), which are better measures of subsidies, rather than medical care, if public facilities give drugs for free. An accurate diagnosis and prescription can be taken to a pharmacist for filling. What is not measured, but what is both part of the intuition that quality matters and the part of that is specific to the facility, is the accuracy of diagnosis and the appropriateness of treatment.

The remainder of the paper describes the health care environment in urban India, how the data were collected and how measures of competence and effort were constructed. Section 2 presents descriptive statistics for these variables in both the public and private sectors. Section 3 presents a simple model (with variants) that could help explain the more salient features of the descriptive statistics. 4 Empirical estimation, 5 Results present an empirical strategy and regression analysis of the determinants of effort. We suggest interpretations of the coefficients given the associated identification problems. Section 6 offers a tentative policy discussion and a discussion of further research.