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Lessons from Early Experience with Pay for Performance

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Disease Management & Health Outcomes

Abstract

Pay-for-performance schemes share the common approach of offering financial incentives to healthcare providers for achieving specified performance targets. Such schemes are becoming increasingly popular with healthcare policy makers and funders worldwide, despite a relative lack of evidence on their long-term effects. This article examines the emerging evidence and its likely consequences for the future development of pay for performance. Successful schemes are likely to be those that use evidence-based targets; focus on aspects of care for which there is a professional consensus on the need for improvement; incentivize practitioners across the range of performance; allow for professional judgment and discretion; offer adequate incentives; adjust for risks outside practitioners’ control; involve patients in the design and implementation stages; make performance data publicly available; have a proper infrastructure in terms of adequate information technology systems and a receptive group of professionals; and are supported by other effective quality improvement initiatives. However, even the most successful schemes carry the risk of unintended effects, such as loss of professionalism, neglect of unincentivized activities, and fraudulent behavior. These risks need to be weighed against the potential benefits of financial incentives, and, in any future pay-for-performance schemes, should be mitigated during development and carefully monitored during implementation.

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Acknowledgments

The author has no conflicts of interest that are directly relevant to the content of this review. No sources of funding were used to assist in the preparation of this review.

The author is grateful for discussions with Catherine Fullwood, Martin Roland and Bonnie Sibbald of the National Primary Care Research and Development Centre, and with Hugh Gravelle of the University of York.

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  1. National Primary Care Research and Development Centre, University of Manchester, Manchester, UK

    Tim Doran (clinical research)

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Correspondence to Tim Doran.

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Doran, T. Lessons from Early Experience with Pay for Performance. Dis-Manage-Health-Outcomes 16, 69–77 (2008). https://doi.org/10.2165/00115677-200816020-00001

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