Study Finds Weak Correlation Between Financial Incentives, Improved Quality of Care

A new white paper says there is "little rigorous evidence" linking financial incentives to improvements in quality of primary healthcare, and little proof that such an approach is cost-effective compared to other quality improvement initiatives.

The paper's Australian authors based their review on seven studies of incentive programs in the United States, United Kingdom and Germany. Three studies evaluated single-threshold target payments, one examined a fixed fee per patient achieving a specified outcome, one evaluated payments based on the relative ranking of medical groups' performance (or tournament-based pay), one examined a mix of tournament-based pay and threshold payments and one evaluated changing from a blended payments scheme to salaried payment.

The authors examined how physicians under these payment plans screened for diseases, referred patients to follow-up care or helped patients achieve a certain outcome. The results were mixed. Six of the seven studies showed positive but modest effects on quality of care for some primary outcome measures, but not all, according to the report.

The authors concluded that more rigorous study designs need to be used to account for the selection of physicians into incentive schemes, and implementation of financial incentives should proceed with caution. The authors also suggest incentive schemes be more carefully designed before implementation.

Read the white paper, "The Effect of Financial Incentives on the Quality of Health Care Provided by Primary Care Physicians," in full. 

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Results of CMS' Hospital Quality Incentive Demonstration Suggest Benefits of Paying for Quality

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