Net Costs of Health Worker Rural Incentive Packages: An Example from the Lao People’s Democratic Republic

Many developing countries are examining whether to institute incentive packages that increase the share of health workers who opt to locate in rural settings; however, uncertainty exists with respect to the expected net cost (or benefit) from these packages. CapacityPlus utilized findings from discrete choice experiment surveys applied to students training to be health professionals and costing analyses in Lao People’s Democratic Republic to model the anticipated effect of incentive packages on new worker location decisions and direct costs. In this example, incentive packages that do not invest in capital-intensive components generally should produce larger net benefits. Combining discrete choice experiment surveys, costing surveys, and cost-benefit analysis methods may be replicated by other developing countries to calculate whether health worker incentive packages are viable policy options.