Contracting for Health: Evidence from Cambodia

In 1999, Cambodia contracted out management of government health services to NGOs in five districts that had been randomly made eligible for contracting. The contracts specified targets for maternal and child health service improvement. Targeted outcomes improved by about 0.5 standard deviations relative to comparison districts. Changes in non-targeted outcomes were small. The program increased the availability of 24-hour service, reduced provider absence, and increased supervisory visits. There is some 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.