Advanced healthcare systems are moving toward greater efficiency, transparency and accountability, and this trend is not likely to change
There is no single measure that will improve service delivery and patient outcomes, ensure financial sustainability and increase accountability and transparency in a health system
The jury is still out on whether financial incentive mechanisms, such as pay-for-performance, work as intended and deliver value for money
The research literature is rich in lessons policymakers need to keep in mind when developing and rolling out pay-for-performance programs:
Program design
Build on what already exists
Formulate a clear business case that defines the objectives of the program in terms of the desired outcomes
Define performance using absolute and relative thresholds, ensure target can be adjusted over time and attribute credit for performance to participants in ways that foster care across serviced populations and not on a case-by-case basis
Ensure methodologies for risk adjustment are developed prior to the program’s introduction
Model and evaluate the program carefully before implementation and at regular intervals afterward. Pilot the program before rolling it out in a phased approach
Consider regional disparities when modelling and evaluating the program prior and post implementation
Design the program to drive improvement and quality across a range of service providers performing at various levels and not just reward current high performers
Performance targets must be perceived as being achievable although not without some additional effort
Allow room for innovation and flexibility
Data collection
Ensure strong health information systems are in place
Use rigorous and verifiable data collection methods and analysis, allow for health service providers to review/correct/supplement data and determine rewards using long-term data trends
Incentives
Incentives should be sufficient, equitable and transparent in order to have any effect
Incentives should reach various levels within an organisation
Financial incentives are more likely to have the intended effect where there is one single funder
Stakeholders
Secure strong political and management support
Design the program collaboratively with health service providers and professional health associations and organisation
Keep in mind
Pay-for-performance can yield small gains at large costs, particularly when targets are set in the absence of a good baseline
Potential perverse and unintended consequences need to be carefully considered
Not everything can be measured. Current pay-for-performance programs focus on clinical and organisational measures, which may be relatively easy to measure through objective data or observation, but there are other aspects that are less easily quantified and are only briefly considered in many pay-for-performance programs such as: continuity of care, ease of access to care, strength of the patient-doctor relationship and patient satisfaction
Beyond pay-for-performance
Payment systems and financial incentive programs cannot do everything. Many of their key objectives, such as lowering costs, improving quality and driving appropriate change, are goals that are achievable in concert with other policy initiatives
Invest in outcomes and health service researc
