Contracting for Health: Evidence from Cambodia

Contracting for Health: Evidence from Cambodia


  • David Clingingsmith
  • Michael Kremer
  • Erik Bloom
  • Benjamin Loevinsohn
  • Indu Bhushan
  • Elizabeth King
  • Rathavuth Hong




Distortions in both government and private fee-for-service healthcare provision are severe in developing countries, leading many to question whether the large increases in health care spending that many have proposed will have much impact. Cambodia recently tried a new approach to service delivery by contracting out management of government health services to NGOs in five districts that had been randomly made eligible for the approach. The contracts specified targets for maternal and child health service improvement. Targeted outcomes improved dramatically by about 0.5 standard deviations relative to comparison districts. Changes in non-targeted outcomes were small. The program reduced provider absence, increased supervisory visits by managers, and improved hospital care. There is indirect evidence it improved health. The program involved increased public health funding, but led to roughly offsetting reductions in private expenditure as residents in treated districts switched from unlicensed drug sellers and traditional healers to government clinics.