Pay for Performance (P4P): It Doesn’t Work

In a study (unfortunately gated) published in the July/August issue of Health Affairs, Steven Pearson of Massachusetts General Hospital and coauthors evaluate the impact on quality of all P4P programs introduced into physician group contracts during 2001-2003 by the five major commercial health plans operating in Massachusetts.  Overall, P4P contracts were not associated with greater improvement in quality compared to a rising secular trend.

Comments (4)

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  1. Devon Herrick says:

    Pay for Performance is essentially the payers of health care attempting to tell the providers of health care how to practice medicine. This makes little sense; providers are the ones with the medical degree. People who aren’t licensed to practice medicine are essentially trying to second guess those who are.

    What we really need are providers competing on price and quality. Under the current system they have precious little incentive to push for that and, Pay for Performance offers even less as a solution.

  2. Devon Herrick says:

    Care is highly fragmented and often piecemeal because of how we compensate doctors. We pay them by task and their reimbursement is for activities rather than the quality of the outcomes.

    Unfortunately, most pay for performance schemes are little more the than payers telling doctors how to practice medicine. What we really need is doctors competing to find more efficient and effective ways to treat patients. If we changed the way we reimburse doctors, physicians might actually compete on the basis of price and quality.

    The Wall Street Journal health blog also took up the issue of P4P this week:

  3. […] that CMS has already been trying out all these ideas through pilot projects. As reported here and here these experiments have been hugely disappointing. No money is being saved. Contractors are pulling […]

  4. Prince says:

    We have excellent hetlah care and the best hospitals in the world. That’s not the problem. We need insurance reform. Why should a chemo patient have to worry about whether his insurance will cover his treatment? Elderly people are halving their pills to make them last longer.I’ve read each candidate s hetlah care plans. I don’t like any of them and Congress will never approve anyway.