The Issue
Pay-for-performance arrangements in health care that reward providers for improvement on certain clinical activities may have the unintended consequence of diverting attention from other, unrewarded tasks.
What the Study Found
Researchers designed a study using the United Kingdom's Quality and Outcomes Framework, which seeks to enhance health care providers' performance by linking 25 percent of their income to indicators of quality, care organization, and patient experience. They compared changes in provider performance on measures that were part of the incentive program, as well as performance changes in measures for which providers did not receive incentives.
- In the first year of the program, achievement rates for incentivized indicators were significantly higher than expectations for 22 of 23 examined indicators.
- Improvement on measures slowed but continued in the next two years of the program, and achievement remained significantly above projected rates for the incentivized indicators.
- Overall achievement rates for non-incentivized indicators were significantly below those for incentivized indicators for all activities, suggesting that "improvements associated with financial incentives seem to have been achieved at the expense of small detrimental effects on aspects of care that were not incentivized."
Conclusions
Findings illustrate the limitations of financial incentive programs in health care and the importance of monitoring activities that are not incentivized, as well as those that are, when determining such programs’ success or failure.