This article identifies and discusses key conceptual issues in designing and implementing pay-for-quality programs. Such programs offer financial incentives to providers for achieving predefined quality targets. The purpose of the article is to provide health care professionals with a framework for designing, implementing, and evaluating pay-for-quality programs. Examples are drawn from the Rewarding Results demonstration project for which the authors serve as the national evaluation team.
Rosenthal MB, Fernandopulle R, Song HR, et al.Paying for quality: providers’ incentives for quality improvement. Health Aff. 2004;23:127-141.
2.
Medicare Quality Improvement Act of 2004. United States Senate, Bill No. S2562.
3.
McGlynn EA, Asch SM, Adams J, et al.The quality of health care delivered to adults in the United States. N Engl J Med. 2003;348:2635-2645.
4.
Institute of Medicine. To Err Is Human: Building a Safer Health System. Washington, DC: National Academies Press; 1999.
5.
Institute of Medicine. Crossing the Quality Chasm: A New Health System for the 21st Century. Washington, DC: National Academies Press; 2001.
6.
Dudley RA, Frolich A, Robinowitz DL, et al.Strategies to Support Quality-Based Purchasing: A Review of the Literature. Technical Review 10. Prepared by the Stanford-University of California San Francisco Evidence-based Practice Center under contract No. 290-02-0017. AHRQ Publication No. 04-0057. Rockville, Md: Agency for Healthcare Research and Quality; July 2004.
7.
Armour BS, Pitts MM, Maclean R, et al.The effect of explicit financial incentives on physician behavior. Arch Intern Med. 2001;161:1261-1266.
8.
Amundson G, Solberg LI, Reed M, et al.Paying for quality improvement: compliance with tobacco cessation guideline recommendations. Jt Comm J Qual Saf. 2003;29(2):59-65.
9.
Stajkovic AD, Lutans F.Differential effects on incentive motivators on work performance. Acad Manage J. 2001;4:580-590.
10.
Smith PC, York N.Quality incentives: the case of U.K. general practitioners. Health Aff. 2004;23(3):112-118.
11.
Shortell S.Increasing value: a research agenda for addressing the managerial and organizational challenges facing health care delivery in the United States. Med Care Res Rev. 2004;61(3):12S-30S.
12.
Baker G.Pay for Performance Incentive Programs in Healthcare: Market Dynamics and Business Process. San Francisco, Calif: ViPS Inc and Med-Vantage; 2004.
13.
Albert T.New Jersey court derails Medicare incentive pay project. Available at: amednews.com. Accessed May 10, 2004.
14.
Becker LJ. Joint effect of feedback and goal setting on performance: a field study of residential energy conversation. J Appl Psychol. 1978;63:928-933.
15.
Locke EA, Shaw KN, Saari LM, et al.Goal setting and task performance: 1969-1980. Psychol Bull. 1981;90:125-152.
16.
Locke EA, Frederick E, Lee C, et al.Effect of self-efficacy, goals, and task strategies on task performance. J Appl Psychol. 1984;69:241-251.
17.
Casalino L.The unintended consequences of measuring quality on the quality of medical care. N Engl J Med. 1999;341:1147-1150.
18.
Durham CC, Bartol KM. Pay for performance. In: Locke EA, ed. Principles of Organizational Behavior. Oxford, UK: Blackwell; 2000.
19.
Town R, Wholey DR, Kralewski J, et al.Assessing the influence of incentives on physicians and medical groups. Med Care Res Rev. 2004;61(3):80S-118S.
20.
Frey BS. On the relationship between intrinsic and extrinsic work motivation. Int J Ind Organ. 1997;15:427-439.
21.
Berwick D.The toxicity of pay for performance. Qual Manag Health Care. 1995;4(1):27-33.
22.
Davies HTO, Mannion R.Clinical governance: striking a balance between checking and trusting. In: Smith PC, ed. Reforming Markets in Health Care: An Economic Perspective. Buckingham, UK: Open University Press; 1999.
23.
Zaslavsky AM, Hochheimer JN, Schneider EC, et al.Impact of sociodemographic case mix on the HEDIS measures of health plan quality. Med Care. 2000;38:981-992.