Early Experience With Pay-for-Performance: From Concept to Practice

Department of Health Policy and Management, Harvard School of Public Health, Boston, Mass 02115, USA.
JAMA The Journal of the American Medical Association (Impact Factor: 35.29). 11/2005; 294(14):1788-93. DOI: 10.1001/jama.294.14.1788
Source: PubMed


The adoption of pay-for-performance mechanisms for quality improvement is growing rapidly. Although there is intense interest in and optimism about pay-for-performance programs, there is little published research on pay-for-performance in health care.
To evaluate the impact of a prototypical physician pay-for-performance program on quality of care.
We evaluated a natural experiment with pay-for-performance using administrative reports of physician group quality from a large health plan for an intervention group (California physician groups) and a contemporaneous comparison group (Pacific Northwest physician groups). Quality improvement reports were included from October 2001 through April 2004 issued to approximately 300 large physician organizations.
Three process measures of clinical quality: cervical cancer screening, mammography, and hemoglobin A1c testing.
Improvements in clinical quality scores were as follows: for cervical cancer screening, 5.3% for California vs 1.7% for Pacific Northwest; for mammography, 1.9% vs 0.2%; and for hemoglobin A1c, 2.1% vs 2.1%. Compared with physician groups in the Pacific Northwest, the California network demonstrated greater quality improvement after the pay-for-performance intervention only in cervical cancer screening (a 3.6% difference in improvement [P = .02]). In total, the plan awarded 3.4 million dollars (27% of the amount set aside) in bonus payments between July 2003 and April 2004, the first year of the program. For all 3 measures, physician groups with baseline performance at or above the performance threshold for receipt of a bonus improved the least but garnered the largest share of the bonus payments.
Paying clinicians to reach a common, fixed performance target may produce little gain in quality for the money spent and will largely reward those with higher performance at baseline.

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    • "These employ the " expenditure " governing instrument (also called " treasure " ). One example is the family of pay-forperformance (P4P) experiments for physician services underway in such jurisdictions as the United Kingdom, United States, Australia and Ontario (Devlin et al. 2006; Doran et al. 2006; Epstein 2006; Pink et al. 2006; Rosenthal et al. 2005), which often tie funds to performance of desired activities (Marks et al. 2011). Another involves changes in the financial incentives for hospitals, including moves to activity-based funding (Chalkley and Malcomson 2000; Sutherland 2011; Sutherland et al. 2011). "
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    ABSTRACT: Accountability is a key component of healthcare reforms, in Canada and internationally, but there is increasing recognition that one size does not fit all. A more nuanced understanding begins with clarifying what is meant by accountability, including specifying for what, by whom, to whom and how. These papers arise from a Partnership for Health System Improvement (PHSI), funded by the Canadian Institutes of Health Research (CIHR), on approaches to accountability that examined accountability across multiple healthcare subsectors in Ontario. The partnership features collaboration among an interdisciplinary team, working with senior policy makers, to clarify what is known about best practices to achieve accountability under various circumstances. This paper presents our conceptual framework. It examines potential approaches (policy instruments) and postulates that their outcomes may vary by subsector depending upon (a) the policy goals being pursued, (b) governance/ownership structures and relationships and (c) the types of goods and services being delivered, and their production characteristics (e.g., contestability, measurability and complexity).
    09/2014; 10(SP):12-24. DOI:10.12927/hcpol.2014.23932
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    • "The best evidence to date on the effects of P4P programs are from two observational studies in the U.S. drawn from the P4P initiatives introduced by a large network Health Managed Organization (HMO): PacifiCare Health Plan. The first study (Rosenthal et al. 2005) examined the effect of Quality Incentive Programs (QIP) provided by PacifiCare Health Plan to medical groups in California in 2002 on physician delivery of cervical cancer screening, mammography and haemoglobin A1c test. It used a difference-in-difference design by comparing provider groups in California which were affected by these incentives with provider groups in the Pacific Northwest which were unaffected by the incentives but also contracted with PacifiCare Health Plan. "
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    ABSTRACT: This study exploits a natural experiment in the province of Ontario, Canada, to identify the impact of pay-for-performance (P4P) incentives on the provision of targeted primary care services and whether physicians' responses differ by age, size of patient population, and baseline compliance level. We use administrative data that cover the full population of Ontario and nearly all the services provided by primary care physicians. We employ a difference-in-differences approach that controls for selection on observables and selection on unobservables that may cause estimation bias. We implement a set of robustness checks to control for confounding from other contemporaneous interventions of the primary care reform in Ontario. The results indicate that responses were modest and that physicians responded to the financial incentives for some services but not others. The results provide a cautionary message regarding the effectiveness of employing P4P to increase the quality of health care. Copyright © 2013 John Wiley & Sons, Ltd.
    Health Economics 08/2014; 23(8). DOI:10.1002/hec.2971 · 2.23 Impact Factor
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    • "A recent systematic review of the evidence base for the effects of financial incentives on the quality of health care provided by primary care physicians found seven relevant studies.17 Three of these studies evaluated single-threshold target payments in the US12,16 and Germany,18 one considered a mixed fee per patient and threshold target system in the US,19 one examined a fixed fee per patient achieving a specified outcome in the US,20 another considered a US tournament-based scheme,21 and the final study included evaluating the English experience of changing blended payments to a salaried system.22 Six of these seven studies showed modest and inconsistent positive effects on quality of care for some primary outcome measures, and one found no effect whatsoever. "
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    ABSTRACT: Increasingly, financial incentives are being used in health care as a result of increasing demand for health care coupled with fiscal pressures. Financial incentive schemes are one approach by which the system may incentivize providers of health care to improve productivity and/or adapt to better quality provision. Pay for performance (P4P) is an example of a financial incentive which seeks to link providers' payments to some measure of performance. This paper provides a discussion of the theoretical underpinnings of P4P, gives an overview of the health P4P evidence base, and provide a detailed case study of a particularly large scheme from the English National Health Service. Lessons are then drawn from the evidence base. Overall, we find that the evidence for the effectiveness of P4P for improving quality of care in primary care is mixed. This is to some extent due to the fact that the P4P schemes used in primary care are also mixed. There are many different schemes that incentivize different aspects of care in different ways and in different settings, making evaluation problematic. The Quality and Outcomes Framework in the United Kingdom is the largest example of P4P in primary care. Evidence suggests incentivized quality initially improved following the introduction of the Quality and Outcomes Framework, but this was short-lived. If P4P in primary care is to have a long-term future, the question about scheme effectiveness (perhaps incorporating the identification and assessment of potential risk factors) needs to be answered robustly. This would require that new schemes be designed from the onset to support their evaluation: control and treatment groups, coupled with before and after data.
    Risk Management and Healthcare Policy 07/2014; 7. DOI:10.2147/RMHP.S46423
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