Pay for Performance Overview

Healthcare Pay for Performance (P4P) programs reward hospitals, physician practices and other providers with both financial and non-financial incentives based on performance on select measures. These performance measures can cover various aspects of healthcare delivery: clinical quality and safety, efficiency, patient experience and health information technology adoption. Sponsors of P4P programs typically include government agencies, health insurance plans (health plans), employers (purchasers), healthcare providers, and a variety of coalitions. 

Many of the P4P programs worldwide have shown improvements in clinical quality measures and success in encouraging providers to adopt clinical decision systems.  P4P programs that include measurement and reward for efficiency and appropriate resource use have also yielded cost savings. Generally, P4P results have demonstrated very modest improvements in patient experience.  Concerns have been raised about potential unintended consequences of P4P such as exacerbation of health disparities and avoidance of non-compliant patients or patients with multiple health conditions. However, little evidence of these concerns has been reported.

Early lessons have revealed that P4P programs can engage providers and change behavior. P4P programs that 1) send actionable and timely patient follow-up results (care alerts) to providers, 2) offer incentives for providers to adopt health information technology, and 3) encourage providers to participate in continuous quality improvement practices and collaborative learning have reduced unnecessary practice variation.