Pay-for-performance has become increasingly common in health care. According
to recent surveys, almost 100 pay-for-performance initiatives nationwide are
now sponsored by a variety of health plans, employer coalitions, and government
purchasers that are intended to improve the quality of care provided.1
However, the rationale for pay-for-performance comes almost entirely
from experience with incentives in other industries. Only 9 randomized controlled
trials (RCTs) of pay-for-performance have been reported in the literature.2 Even these studies are not clearly applicable to current
pay-for-performance because they all focus on performance for a single indicator
or a single aspect of care (eg, preventive care), whereas most current pay-for-performance
initiatives use multiple indicators for multiple conditions and types of care.1 Moreover, most studies have important flaws in reporting,
such as the failure to note the market share of the organization offering
the incentive in the practices of the providers being studied. Because pay-for-performance
programs have targeted both individual clinicians and clinical organizations
such as hospitals, medical groups, and nursing homes, the collective term
“provider” is used herein to refer to all potential parties.
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