Can a high-powered financial incentive programme reduce resignation rates among healthcare providers in rural areas? Evidence from Thailand’s 2008 Hardship Allowance programme

Abstract

Abstract Geographic disparities in the availability of healthcare providers remain a global health challenge. Financial incentives have been widely implemented to attract rural healthcare workers with limited scientific evidence in developing economies. In this study, we investigate the relationship between financial incentives and rural resignations in a middle-income country using Thailand’s Hardship Allowance programme that first doubled or tripled but later decreased direct payments to rural providers. This retrospective observational study used data on dentists’ work status from the Human Resource Management Department at the Ministry of Public Health in Thailand. Segmented regression and difference-in-differences approaches were used to analyse the effect of changes to the Hardship Allowance on rural dentists’ resignation and relocation patterns. We found that the dramatic increase in the Hardship Allowance in 2008 was associated with a decrease in resignation rates among dentists in rural areas. However, after Thailand recategorized certain rural districts into urban areas in 2016, dentists were more likely to relocate from the newly urbanized areas to established urban centres, likely due in part to reductions in the Hardship Allowance that accompanied recategorization. However, we did not find that resignations increased in these affected areas. Finally, in a subgroup analysis, we found that older dentists were less likely than younger dentists to relocate from areas affected by the 2016 rural-to-urban recategorization. Overall, our study found that a dramatic increase in financial incentives reduced resignation rates in rural Thailand, but a reversal of the incentives as a result of rural-to-urban reclassification resulted in relocations from the affected areas to established urban centres. When considering their strategic goals of equitable healthcare workforce distribution, policymakers should be aware that both direct and indirect changes to payment incentives may affect dentists’ resignation and practice location decisions and that these decisions may be influenced by provider demographics.