# **Introduction**

Measures of user-satisfaction are widely used as indicators of public sector performance and a tool for improving accountability. They hold a particularly attractive promise for assessing quality in the delivery of health care, since health _outcomes_ reflect multiple factors and take a long time to change. Clearly, the extent to which measures of user-satisfaction can be used to increase incentives for doctors depends on whether they reflect an aspect of performance that doctors can control.

Using data from Paraguay collected by the Centro de Información y Recursos para el Desarrollo (CIRD) in collaboration with the authors, this paper empirically assesses whether patient satisfaction responds to a measurable component of doctor performance that is also likely to improve the quality of medical advice. If so, satisfaction could be used as a measure of performance; further, if this is an aspect of performance that the doctor can control, incentive payments based on satisfaction measures could also lead to improvements in medical care.

The core of the empirical exercise is the simultaneous measurement of doctor performance and patient satisfaction. The measure of doctors’ performance, which we call doctor “effort”, is based on an easily observable set of actions undertaken by doctors in their interactions with patients. To measure effort, interviewers observed doctor-patient interactions and noted, for every interaction, the time spent, the questions asked and the examinations performed. These three indicators were combined into a single index of effort using principal component analysis. To measure patient satisfaction, a second interviewer conducted an exit survey outside the doctor’s office for every patient. This exit survey also included questions on patient’s socio-economic background and health status.

The results show that patient satisfaction _is_ positively correlated with doctor effort within a multivariate regression context. However, the correlation between satisfaction and effort is small to begin with, and disappears once provider and patient characteristics are adequately controlled for through doctor fixed-effects (more on this below). In contrast, the interview location and/or the time since the last interaction with the doctor dramatically alters reported satisfaction, suggesting that factors other than a measurable aspect of the doctor’s performance play a large role in the determination of patient satisfaction.

There are several reasons for our focus on doctor effort as an indicator of performance. First, higher effort leads to better care—recent studies show that doctor effort is strongly correlated with the doctor’s medical knowledge and with the quality of medical advice (Das and Hammer 2006, Leonard and others 2005). This suggests that effort and competence are complements—if they were substitutes so that less competent doctors exert _higher_ effort, the relationship between effort and quality of care becomes unclear. Second, as these studies document, the problem is not that doctors do not know what to do, it’s that they put in too little effort relative to what they _do_ know. Das and Hammer (2006) for instance, show that increases in the quality of care due to a 5-year medical degree are completely offset by the difference in effort between the public and private sector in India. Third, if doctors are to be rewarded for their performance, the reward has to be based on an aspect of the doctors’ practice that s/he can control. Although doctors could acquire training to improve their competence, in the short-run, all improvements in the quality of care are likely to arise from higher effort in clinical practice. If measures of user-satisfaction are then to be used as quality indicators in (say) pay-for-performance schemes, a positive correlation between satisfaction and effort is a reasonable minimum requirement.

This paper contributes to a growing literature suggesting that patient satisfaction depends on characteristics of the facility, the doctor and the patient, as well as aspects of the interaction between the doctor and the patient (Crow et all 2002, Williams, S et all 1998 and Avis et all 1997). Given the multiple factors that affect patient satisfaction, there is little consensus about whether satisfaction 2