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Incentivising Quality of Care in Indian health systems: towards both financial and non-financial incentive programmes?

By Sanjeev Kumar
on March 21, 2021

Quality of Care (QoC) is at the center of the global Universal Health Coverage (UHC) drive, aiming to ensure a higher likelihood of desired health outcomes with the services provided. Nowadays, the use of incentives is increasing to improve health care performance, worldwide, but it’s fair to say that there’s still a long way to go, certainly in low-and-middle-income countries (LMICs). In LMICs, more than 8 million people still die every year from preventable conditions. In India, around 1.6 million Indians died due to poor quality of care in 2016.

In 1990, the Institute of Medicine defined   QoC as “the degree to which health services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge.” To improve the quality of care, both technical and service quality are equally important. Technical quality encompasses clinical protocols, infection control, emergency responses, etc., on which service providers rely to achieve improved service outcomes. Service quality, on the other hand, refers to patient care aspects such as promptness of service delivery, courteous staff behavior, privacy, and dignity of services. And clearly, QoC pertains to all levels of care.

QoC in India

In 2007, the Ministry of Health and Family Welfare (MoHFW), Government of India (GoI) released the Indian Public Health Standards (IPHS) as the reference point for public health care infrastructure planning and upgradation, in order to improve the quality of health care delivery in the country.  The Quality Council of India was established during 2008-12 as a private sector initiative. The National Accreditation Board of Hospitals and Health Care Providers (NABH) had been set up to standardize services across the public-private sector health facilities in 2005. Subsequently, in 2013, National Quality Assurance Standards (NQAS) were launched to improve public hospitals’ service delivery. NQAS are primarily meant for providers to assess the quality of services at their facilities against pre-defined standards and make necessary improvements to prepare for NQAS certification. In 2015, MoHFW initiated the Kayakalp Program  to promote cleanliness and hygiene in government hospitals.  LaQshya Program, launched in 2017, specifically targeted the quality of maternity care services in government facilities. In 2020, Ayushman Bharat, a publicly funded insurance program, laid down a new set of quality standards for hospitals.

In addition to financial incentives, also non-financial ones?

So far, India’s QoC efforts have mainly relied on awarding financial incentives to government health facilities under the NQAS, LaQshya, and Kayakalp programs. For instance, under the NQAS program, approximately 5000 Rs. (~US$ 68) per bed has been provisioned annually. The private health sector is also on the same path whereby insurance agencies provide higher package rates for NQAS or NABH accredited hospitals. Furthermore, under the Ayushman Bharat scheme, additional funds (10% and 15%) are provisioned for certified impanelled hospitals.

In India, financial incentives that rely on performance measurement are impossible to implement due to a lack of appropriate quality metrics. The country faces a considerable quality data challenge in the health system, which hinders incentive implementation. Powell JT’s study on Janani Suraksha Yojana (A Conditional Cash Transfer scheme for Maternity Care) in India revealed that cash incentives for women lead to increased maternity services uptake. Still, there was no substantial evidence to associate the financial incentive with neonatal or early neonatal mortality reduction.

In addition to financial incentives, non-financial incentives for QoC could be another way to boost QoC.  Health systems may promote non-financial incentives and incentive structures to improve QoC. Pronovost and Hudson highlight the role of professional bodies in internally driving quality improvement efforts while serving as learning communities with peer recognition and feedback as a strong incentive for change. A Market Segmentation Study among maternal care providers in Uttar Pradesh in India revealed that motivation for improving care across a diversity of caregivers saw community and peer recognition as the most commonly reported motivational factors. Therefore, boosting healthcare providers’ intrinsic motivation, through approaches like this, seems to be a powerful method for improving quality and reducing medical harm.


Clearly defined metrics for quality measurement and adequate data collection and sharing to validate and monitor such information could play an essential role in improving the implementation of the current QoC incentives in India. However, financial incentive structures alone won’t suffice to drive quality improvement.  Non-financial incentives and incentive structures could play an additional influential role in driving  QoC in India to improve health outcomes further.

The author acknowledges Rajeev Sadanandan, Dr Devadasan, and Dr Vijayshree for their valuable feedback and comments.

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