Case Study: The Financial Incentive Policy in Morocco PDF 2024

Case study The performance-based incentives policy and health system reforms in Morocco Pr Zakaria Belrhiti 24 Septembre 2024 Introduction Since 2000, Morocco has implemented similar New Public Management (NPM) reforms, which include hospital reforms, results-based budgetary changes, outsourcing,...

Case study The performance-based incentives policy and health system reforms in Morocco Pr Zakaria Belrhiti 24 Septembre 2024 Introduction Since 2000, Morocco has implemented similar New Public Management (NPM) reforms, which include hospital reforms, results-based budgetary changes, outsourcing, and the restructuring of hospital governance in response to rising health needs (epidemiological transition, high burden of non-communicable diseases), increased urbanization, and fragmented health financing. These reforms aimed to strengthen local health system governance by institutionalizing quality assurance programs, establishing strategic hospital frameworks, performance-based budgeting, and redesigning organizational structures. Evidence from Morocco shows that these reforms were accompanied by increased tensions among doctors, nurses1, medical students (2) and health managers low levels of interprofessional collaboration, and even power struggles. Additionally, several implementation challenges arose due to health worker demotivation, lack of organizational learning, and deviant behaviors such as dual private practices and corruption. A contributing factor was the rising discretionary power of unionized health workers, who, after the Arab 1 https://www.moroccoworldnews.com/2024/07/364052/moroccan-health-workers- begin-five-day-strike-amid-government-silence 2 https://www.moroccoworldnews.com/2024/04/362175/minister-urges-moroccos- medical-students-to-end-strike-to-save-academic-year 1 Spring in 2011, gained concessions from the Moroccan government regarding wages through strikes, protests, and resistance to performance-based management (Belrhiti et al., 2021). Despite these efforts, numerous challenges remain, as many reforms have fallen short of achieving their goals. Key issues include a lack of care integration, limited hospital autonomy, restricted decision-making power for healthcare managers (Belghiti et al., 2004), poor coordination between primary, secondary, and tertiary care, as well as between public and private health facilities. Additionally, healthcare workers face low motivation, reduced productivity, and ineffective interprofessional and inter-organizational collaboration (Belrhiti et al., 2021; Belghiti Alaoui et al., 2020). In response to these systemic challenges, new legal frameworks were introduced in 2022 to overhaul the national health system. These reforms aimed to institutionalize new governance mechanisms, such as the creation of regulatory bodies like the Higher Authority of Health, tasked with overseeing and evaluating health policies set by the Ministry of Health. The Ministry’s mandate was expanded to include social protection (Kingdom of Morocco, 2022a). Other key initiatives included the establishment of a National Drug and Medical Product Agency (Kingdom of Morocco, 2022c), and the creation of territorial healthcare networks (decree n°08-22). At the operational level, pay-for-performance schemes were introduced to improve the performance of healthcare organizations and staff (Kingdom of Morocco, 2022a; Kingdom of Morocco, 2022b). The new regulatory frameworks (laws 06-22 and 07-22) emphasize the importance of territorial healthcare groups (THGs) as a cornerstone of decentralization and universal health coverage, moving toward the Sustainable Development Goals. THGs are flexible organizational structures that promote collaboration between hospitals and primary and social care institutions. These networks enhance care coordination, improve care quality, pool resources, contain costs, and respond more effectively to population needs (Emerson, 2018; De Pourcq et al., 2019). In Morocco, territorial healthcare groupings ("Groupements Sanitaires de Territoire" in French) are essential tools for promoting care coordination, improving care quality, and strengthening referral systems between various levels of care and the private sector (Kingdom of Morocco, 2022a). THGs are responsible for strategic regional planning, resource allocation, and the organization of healthcare. They play a crucial role in adapting national health policies to local contexts by coordinating clinical pathways, developing regional health projects, and tailoring responses to the specific needs of populations (Kingdom of Morocco, 2022a). Strikes among doctors, nurses and Medical students There had been long standing discontent among medical students (in regard to medical education reforms) and public sector doctors and nurses employees of the Ministry of Health, over their extremely low wages. Junior doctors (interns, residents), who on average work longer hours than senior doctors (professors and experienced specialists), and are unlikely to 2 have their own private clinic, were particularly restless over the issue. Not surprisingly, they were the first to agitate for and initiate unionized action, using the disparity created between the pay of doctors employed by the private sector and that of other public sector doctors as a trigger to take action on their long-standing discontent over remuneration. The Ministry of health engaged a global reforms of wages scales among medical doctors, professors, interns, residents that resulted 1) salary increases or 2) compensation for work overload or 3) compensation for long hours worked beyond the standard 40 hours per week in the form of an Additional Duty Hours Allowance 4) Performance based incentives based on a variable and fixed salary increase. The variable salary will increase on the basis of the number of clinical activities produced. Doctors employed in the public sector provide a large part of services in the health sector. There is a thriving licensed private sector, but it is predominantly in the metropolitan and larger urban areas, and not affordable for poorer people. In rural remotes areas only the public sector facilities are the providers of healthcare services. The strike therefore effectively brought health service delivery which reduced the uptake of medical consultation and hospitalization in the public sector even in the teaching university hospitals (Ibno Sina and Ibno Rochd hospitals). The bed occupancy rates dropped which benefited the private sector where most public doctors and nurses without government scrutiny. Introduction of performance-based incentive by the ministry of health Government entered into negotiation with UNIONS and selected the option of payment of PERFORMANCE BASED INCENTIVES. It appears Government picked this option to buy time and also because the Ministry of Finance felt that given their low numbers, such a payment for doctors only (instead of all categories of health workers) would not make much noticeable difference to the government budget for the year. Last but not least, it was felt to be generally true that doctors were indeed working extremely long hours with variable productivity. Same received salaries without sufficient medical and surgical activities during their working hour. Yet, their low productivity impacted negatively the satisfaction of populations and the quality of care and increased waiting times in hospitals. Memorandum of Understanding (MOU) was signed between the government and the UNIONS to take effect from 1st January 2022, in which it was stated that the PERFORMANCE BASED INCENTIVES was intended to be “an incentive to compensate for the abnormally poor basic salaries of the Medical and Dental practitioners in the public sector”, and that the agreement was for “ a variable salary increase will depends on the number of clinical outputs (surgery, consultation, diagnosis, referral and hospitalization performed by individual doctors. 3 Since the UNIONS represents doctors as well as dentists, the arguments were made for both groups and the PERFORMANCE BASED INCENTIVES was to be calculated based on the basis of variable bonuses depending on the volume of service production. The UNIONS called off its strike; but with the provision that if by 1st of March 2023 the promised allowances had not been paid, they would resume the grievance without any warning. In early February 2024 the Ministry of Health released a memo to all regional directors and other administrative levels containing guidelines for implementing the PERFORMANCE BASED INCENTIVES policy. The guidelines stated that payment of PERFORMANCE BASED INCENTIVES was to be done at the facility level with retrospective effect from 1st January 1999. Facilities were to prepare monthly duty rosters for doctors and dentists to ensure 24 hours service. Regional directors of health service and heads of facilities were to monitor implementation arrangements. A review of implementation experiences was planned for May 1999. Funds for the PERFORMANCE BASED INCENTIVES were approved and released on February 26, 2022 to all the 12 regions and the two teaching hospitals. However administrative and procedural delays meant that by 1st March PERFORMANCE BASED INCENTIVES had not been paid. A new cycle of dissatisfaction was created due to the PERFORMANCE BASED INCENTIVES payment delay. On 1st March 2023 junior doctors across the country laid down their tools at what they perceived as a breach of the agreement. They however resumed work on the appeal and reassurance of the UNIONS who had been working with government to resolve the administrative problems)that the money had been released and payment was about to commence. Nurses’ and other health workers’ grievances The decision to give PERFORMANCE BASED INCENTIVES to doctors, that led to doctors’ satisfaction and temporary relief to decisions makers, now became the trigger for unintended consequences by further worsening already low nurse satisfaction over their remuneration. Nurses had been watching the doctor’s strike and its outcome from the sidelines. They also had longstanding grievances over inadequate wages. In April 2022, junior nurses began a strike requesting that nurses also be included in the PERFORMANCE BASED INCENTIVES payments. They were supported by the Registered Nurses Association and the Nurse Anesthesiologists’ association. A seven-day nationwide strike by nurses ground the health sector to a near halt. The strike ended with an agreement between Government and the Nurses Unions to include nurses in the PERFORMANCE BASED INCENTIVES payments, also with effect from 1st January 2023. Administrative requirements were introduced requesting that the overtime payments be calculated based on duty rosters, authorized by the head of institution and verified by information from the attendance books. 4 The decision to include nurses in the PERFORMANCE BASED INCENTIVES not only created improved nurse satisfaction; but now in its turn became the trigger to create a feedback loop for reduced satisfaction and related strike action by other health sector workers. Recognizing that their fragmented nature and small numbers made them ineffective in any negotiation to be included in the PERFORMANCE BASED INCENTIVES payments, the less powerful health worker unions, such as the Government and Hospital Pharmacists Association, the Medical Assistants Association, the Association of Laboratory Scientists and the Association of Health Service Administrators joined forces with the Moroccan Registered Nurses Association. They labeled themselves the “representatives of health workers other than doctors” and also demanded that the Ministry of Health (MOH) include them in the PERFORMANCE BASED INCENTIVES allowances, or else they would strike and engage in terrible grievances. By September 2023, in response to the strikes and agitations, virtually all permanent workers in the health sector were included in the PERFORMANCE BASED INCENTIVES. The MOU for PERFORMANCE BASED INCENTIVES between government and the other health workers' associations was based on 3 conditions: payment would be for additional volume of activities that go beyond a threshold to be set at regional levels by local healthcare managers and professionals. Timesheets should be kept by each individual staff; and they should be cross- checked and verified by management before payment. The MOU was signed on the 30th September 2023. While medical doctors working in teaching Hospitals’ as employees of the Ministry of Health were included in the PERFORMANCE BASED INCENTIVES , those working as full time lecturers in the medical schools, and therefore employees of the Ministry of Education, were not. Doctors teaching in the Medical Schools threatened to stop teaching, and go back into practice in the MOH to improve their salaries. In response, an MOU was also signed between the MOH and the medical school for them to be included in the PERFORMANCE BASED INCENTIVES payment. High cost of PERFORMANCE BASED INCENTIVES , and Payment delays The expanded PERFORMANCE BASED INCENTIVES scheme, including almost all permanent staff in the health sector, did not lead to social peace despite the fact that the PERFORMANCE BASED INCENTIVES payments were often more than the staff salaries themselves and led to a doubling or more of staff incomes. This was because there were repeated delays in payment, leading to further strikes by doctors, nurses and other health workers. As the PERFORMANCE BASED INCENTIVES claims rose steadily, the MOH introduced regional and institutional financial ceilings on the amount of PERFORMANCE BASED INCENTIVES to be paid, to limit the rapid growth in costs. 5 This was not completely successful, and the PERFORMANCE BASED INCENTIVES bill continued to rise, with Government continuing to have difficulties in prompt payment, leading to threats of strikes and actual strikes by health workers to enforce payment. The Health sector entered a vicious cycle of payment delay followed by strikes to enforce payment, followed by payment to end strikes and back again. The cycles appeared to have the additional side effect of creating in the mind of the health workers and their unions the idea that the only language government responded to was unionized action rather than dialogue and trust that agreements would be honored. The repeated delays in payment of PERFORMANCE BASED INCENTIVES were attributed by government to the non-submission of the required verified time sheets and activity reports by the respective administrative levels to enable payment. While there were delays in submission of these returns, it was not clear that this was the full story, given that there were cases where even when submissions had been made, there were still delays in payment. It appeared some if not all the delays were due to government challenges in meeting the mounting bills. The Minister for Finance was not exactly delighted when he saw them because he had not been informed earlier of the problem. He however kept his head, called his technical staff and told them to look carefully at the MOH budget and find out where they could safely take the money from. Their answer was – the MOH capital budget for the year; that year no new capital project could be undertaken. There were also PERFORMANCE BASED INCENTIVES management problems within decentralized regions and facilities that fueled the discontent and unrest. The PERFORMANCE BASED INCENTIVES ceilings often remained constant and did not necessarily change with changes in staffing. There was uneven application of rules on limits and time accounting, so that while some institutions had enough to pay the PERFORMANCE BASED INCENTIVES , others had too little. Staff compared notes and found that similar categories of staff doing similar work in different institutions sometimes received widely varying amounts. Further widening the discrepancies, institutions that generated more funds from out of pocket fees could use those funds to make up for the deficit payments for their staff to maintain some peace and keep services running; while less well-endowed institutions had to make do with whatever they got. Many institutions had staff they employed locally and paid from their internally generated funds, and these (often low paid and unskilled or semi-skilled) staff members were not included in the PERFORMANCE BASED INCENTIVES payments. These inequities generated by the management of the PERFORMANCE BASED INCENTIVES created staff dissatisfaction alongside the satisfaction of better remuneration. Filling of individual time sheets, activity reports and vetting of hours claimed proved an impossible and unpopular task and a major administrative burden. Many institutions implemented unofficial local “PERFORMANCE BASED INCENTIVES Committees” to try and 6 manage the administrative burden and reduce staff discontent related to perceived unfairness in allocation. The PERFORMANCE BASED INCENTIVES budget rose from about US$ 30 billon US dollar which represents 5.74 per GDP 3 with salaries accounting for the bulk of the rise. Salaries were accounting for over 75% of central government allocation to the health sector and once capital investments were also accounted for. In addition to the simmering discontent, unions’ unrest and a rising wage bill in the health sector due to the PERFORMANCE BASED INCENTIVES implementation problems, there were mounting concerns that the overall increase in health expenditure did not seem to translate into improvements in key health sector indicators as witnessed by the stagnating / slow decline in maternal and under-five mortality rates. Health sector indicators are influenced by several variables and it is difficult to attribute one particular reason for observed levels, however, given the legitimate concerns about the insufficient improvement in key health indicators, all policies in the sector over this period – including PERFORMANCE BASED INCENTIVES – were under scrutiny. Consolidation of PERFORMANCE BASED INCENTIVES into salaries The government therefore initiated discussions to consolidate the PERFORMANCE BASED INCENTIVES into salaries. A job evaluation was commissioned in February 2026 to evaluate the various health sector job portfolios. Government issued the report “Restructuring the PERFORMANCE BASED INCENTIVES ” in September 2026; and a circular formalizing the consolidation of PERFORMANCE BASED INCENTIVES into salaries. The last PERFORMANCE BASED INCENTIVES payment was to be in December 2026. The process of consolidating the PERFORMANCE BASED INCENTIVES into salaries became the next trigger for industrial unrest in the health sector. This time, the industrial action by doctors, nurses and other health care workers was over the terms of consolidation and delays in the first new salary payment. There were conflicts and strikes over the creation of 2 pay scales – Health Sector pay Scale 1 (HSS1) at a higher level for doctors and Health Sector pay Scale 2 (HSS2) at a lower level for everybody else. Doctors, satisfied for the time being with their negotiated pay scale, did not go on any further strikes. However all other workers in the sector were aggrieved over what they perceived as an unfair policy. They formed a coalition called the Health Workers Group (HWG) and went on crippling strikes demanding a single pay scale and higher consolidated salaries. Between 2026and 2027 the health sector went through a stormy period as government and the worker unions conflicted over the issues. 3 https://donnees.banquemondiale.org/indicateur/SH.XPD.CHEX.GD.ZS?locations=MA 7 The Health Workers Unions employed the services of a labour expert and Chief Executive Officer of a labour consulting group to represent them before the labour commission and negotiate with government on their behalf. In June 2028, the negotiations were finally completed to everyone’s acceptance, if not full satisfaction. There were still two pay scales but the gaps had been narrowed. The first payment of consolidated salary, back-dated to January 2026 was made. The cycles of PERFORMANCE BASED INCENTIVES related strikes and industrial unrest reached an uneasy calm with unions keeping a watchful eye on the implementation. A Case Study on Human Resources Management in Health Systems There are a number of goals or objectives we would like you to achieve through doing this case study, as listed below: Learning Objectives of the case study Identify the relevant contextual features of this case; Analyse the mindsets, interests, power and agency of key agents in the situation, recognizing the socially constructed nature of health systems; Analyse how the introduction of a human resources policy into the health system disturbed the existing relationships among agents, and was itself affected by those reactions; Identify intended and unintended consequences of the new policy; Plan strategies to lead implementation of the policy; Plan and deliver a group presentation, using effective group work and communication skills. Tasks After reading the case study narrative (pages 7 - 13 of this handout), do tasks A – D below in your small groups, in preparation for a 20 minute presentation about the case study which should cover the following: A. Overview of the case (5 minute presentation) – to include: 1. Key features of the case – Draw a flow diagram showing the main drivers and events of the case and how each stage had consequences, some of which were not intended. 2. Context of the case study - Complete the context analysis form on page 4 identifying the key features of this particular case and how they have contributed to the situation. 8 B. Identify the hardware and software issues and elements which are most important in shaping this case, using guidance from Aragon’s framework below, and explain how they are linked and interact. (5 minute presentation) Understanding.organisa6ons. Hardware:! Organ5 isa6onal. hierarchy. Tangible.so1ware:. Intangible.so1ware:. HR.estab5 Management. lishment. knowledge.and. capabili(es!to!commit!and! skills. engage;!adapt!&!self4renew;! balance!diversity!and!coherence!. Technology. Formal. management. Values.&. Informal. Rela6on5 Comm5 processes. norms. rules. ships. unica6on. Finance. adapted.from.Aragon,.2010. C. Stakeholder analysis. Identify the key agents in the case, and situating them in the time in the scenario immediately after the first national doctors’ strike , map these in diagram 1, (you can use Form 1 on page 5 below to help your analysis) according to their levels of commitment and power to impact on successful implementation of the change. Draw lines between agents who have a close relationship with each other (e.g. through flow of money or information, lines of command or support). Consider how their position on the map changed over time, and be prepared to explain this, as well as agents’ mindsets and levels of power, and how agents are related to each other. (5 minute presentation) D. Leading and managing change. Imagine you are working in the national MoH, in a position to lead and influence policy change. As this leader, think about how you can increase buy-in for the change, and thus achieve more successful implementation. Using the concepts and frameworks above and in the session 7 lecture on ‘Leadership of change in health systems’, design 3 strategies to increase other agents’ buy-in. These could include small wins. In developing strategies also think of the ideas raised in the Duncan Green video. (5 minute presentation) In preparing your presentation remember to do the following: Design the presentation so that the level, language and content are appropriate for your audience; Make sure you have covered all the required information; Organise your points/ideas in a logically and clearly structured way; Introduce the presentation with an attention catching question or comment, and a brief preview of the content; 9  Keep to the allocated time (if possible ask a colleague to check the timing for you); Speak clearly and not too fast; Conclude the presentation with a brief re-statement of the main points or a summarising comment. Guidelines for assessment of group presentations You will use these criteria for assessing the group presentations: Assessment criteria The overview of the case is clear and succinct and gives a clear image of what the case is about. The hardware and software issues at play in the case, and their relationship, are clearly explained. The roles of actors, their mindsets, interests and power are presented and explained convincingly. The suggested strategies for leading change are well motivated. Delivery of the presentation (visual and oral) is clear, using appropriate pace and level, and content is coherently and logically structured. On the next three pages are templates you can use to guide your Context and Stakeholder Analyses. 10 11 CONTEXT ANALYSIS (Remember not all of these issues might be relevant in this particular case!) Contextual feature Specific issues relevant to this experience Impact of these issues on actors (name these) and the case, and implications for policy implementation Micro context organisational climate & culture other policies organisational capacity interpersonal factors Macro context social & political pressures & interests historical & socio- cultural context economic conditions & policy international context environmental factors 12 Form 1. Unpacking agent behavioural drivers and power AGENT Mindsets, values and interests Forms and level of power to influence implementation What are the core elements of the Given the elements identified in What forms of power can the agent What power limits does the actor agent’s ‘mindset’ (beliefs, values, column 1, is actor’s response to the mobilise to support his/her actions face in taking action around the interests driving behaviour in change likely to be committed, around the change? change? general?) compliant, indifferent, resistant, or hostile? 13  Diagram!1:!Agent!map! Locate!your!actors!on!this!map!of!support!and!opposition!for!change,!taking!account!of!their!power!level! ! ! ! ! ! ! ! ! Low!.High! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !Very!committed!!!!resistant!!!>>!!!hostile! Commitment! ! This case study developped by Prof Zakaria Belrhiti based on personal work, publication and under review articles BELRHITI, Z., VAN BELLE, S. & CRIEL, B. 2021. How medical dominance and interprofessional conflicts undermine patient-centred care in hospitals: historical analysis and multiple embedded case study in Morocco. BMJ Global Health, 6, e006140. 14