Pay for Performance

Directives to trim waiting lists using pay-for-performance targets have created a host of unintended consequences for the British National Health Service (NHS).          

Targets create incentives to manipulate patient records and official statistics, corrupting data used to measure system performance. Spot checks of NHS hospitals show that they extensively manipulated the data that were supposed to be used to compile waiting lists. Techniques included deliberately booking operations on days patients were known to be on vacation (thus creating an excuse to suspend them from waiting lists in their absence [link], excluding patients from lists if they had waited "too long" and arbitrarily reclassifying patients so that they were shifted to lists that were not monitored [link].

Government targets for waiting times in accident and emergency departments were fulfilled by re-designating corridors and treatment rooms as "pre-admission units". Wheels were removed from gurneys in order to reclassify them as beds. Hospitals also "stack" ambulances, making patients wait in them until they think that a patient can be seen within the 4 hour target specified by the government [link].

The inefficiency created by arbitrary targets cascades through the health system. Ambulances parked at hospitals are not available to make emergency calls [link]. Making patients wait endangers their health. There are reports of seriously ill patients who have been parked in ambulances for as long as 5 hours. A 16 year old leukemia patient died when an ambulance called to transport him 300 yards to an intensive care unit was kept waiting for two hours despite warnings of an impending heart attack from attending paramedics. [link]

The NHS is even turning to the private sector in an effort to trim its waiting lists. In 1997, its purchases of health care for patients treated outside the NHS accounted for 3 percent of expenditures. By 2006, such expenditures were 7 percent of its budget. [link]

Thanks to a huge bureaucracy dedicated to developing integrated care teams (one focused on promoting health education and an entirely separate one dedicated to setting national clinical guidelines with evidence-based medicine) and an enormous effort to create electronic health records, NHS productivity is dropping like a rock. In 2004, the BBC reported that the Office for National Statistics found that NHS spending grew by 32 to 39 percent. As output grew by only 28 percent, productivity dropped by 3 to 8 percent. [link]

Many US health policy analysts claim that electronic health records will save billions of dollars. The NHS experience with electronic records, for a population 1/5th the size of the population of the United States, calls that claim into question. In June 2000, it launched the National Programme for Information Technology, a 10 year effort to centralize and reform the way the health system in England uses information.

By 2007, the relevant agency was issuing glowing reports on its progress and its contribution to clinical care. Independent observers were not impressed. The House of Commons Committee of Public Accounts reported that the program was two years behind schedule. Although the program was expected to cost ₤12.4 billion according to the National Audit Office, estimates of the actual costs ranged as high as ₤20 billion. There was no evidence that the financial benefits outweighed the costs, and as a result of a too narrow focus on technology, users had been largely ignored in the system's development. As a result, clinicians were refusing to use it. A large software supplier had withdrawn, and at present rates of progress the Committee concluded that it is unlikely that "significant clinical benefits will be delivered by the end of the contract period." [link]

In October 2008, the first hospital to use the system reported so many software flaws in the patient record system that "seriously ill or badly injured patients are at risk of being inaccurately diagnosed." Extra staff are being hired to cope with the revolutionary, cost-saving IT program. [link]

As of November, no other hospital has signed up to use the system. Worried that the program might be grinding to a halt, Unite, the UK's largest union, called on the government to safeguard the jobs of up to 1,000 people working on the project. [link; gated]

In 2005, the NHS issued the usual government IT "guarantee" boilerplate.  Privacy would be protected, it said, and information would be dispensed on a "need-to-know" basis. People would be required to register with the system in order to receive treatment, but they could place sensitive records in a "sealed envelope." [link]

Billions of pounds later, the envelope seems to be missing [link].

By 2007 the NHS had lost personal information on hundreds of thousands of people [link]. In 2008, ComputerWeekly reported that patient records would be open to NHS staff regardless of their professional qualification. Receptionists at Bolton Hospitals Accident and Emergency Department were using clinical records to look up patient addresses. The hospital responded by changing the procedure so that "health care assistants" or "nursing auxiliaries" would view the care records database rather than receptionists. Information on another patient's bout with depression was sent to social services without her permission to social services without her permission. [link]

Comments (5)

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  1. Joe S. says:

    Linda, this is a terrific post. one of your best ever.

  2. Larry C. says:

    I agree with Joe.

  3. Bruce says:

    Has anyone noticed that virtually every study of “pay for performance” shows that it doesn’t work? Yet the more the evidence weighs against it, the louder its advocates seem to be in promoting it.

  4. John Goodman says:

    There is a great article in the Health Care Financing Review by Ariel Linden that reviews the Medicare pilot programs on disease management (basically P4P) and concludes that none of these experiments are working. The cite is here:

  5. […] they see fit, pay-for-performance (”P4P”) has disturbing consequences, as Linda Gorman points out: Targets create incentives to manipulate patient records and official statistics, corrupting data […]