Paying for Performance

Studies show that current provider payment systems tend to discourage quality improvement in the health care system. A frequently suggested solution is "paying for performance," a reference to a range of strategies to reorient payment incentives by rewarding efforts to improve quality. Quality problems have been documented for decades, both in fee-for-service and managed care delivery systems. Paying for performance is a relatively new approach to address longstanding quality problems, by rewarding providers for delivering care that is clinically effective and results in improved health.

This Issue Brief was prepared for The Commonwealth Fund/John F. Kennedy School of Government Bipartisan Congressional Health Policy Conference, January 15–17, 2004.