The Down Side Of Pay-For-Performance

(Ninja M./flickr)

In medicine, the concept of pay-for-performance — in which doctors are rewarded for meeting certain specific quality targets such as preventing hospital-acquired infections or too many readmissions — sounds great.

But in reality, there’s a dark side, according to a new editorial published in the British medical journal BMJ. The authors write that “a growing body of evidence from behavioral economics and social psychology indicates that rewards can undermine motivation and worsen performance on complex cognitive tasks, especially when motivation is high to begin with.”

A related article, also in the BMJ, proposes a checklist to try to guard against such distorted behavior.

In a joint news release, the authors say that while pay-for-performance is becoming widely adopted — in the federal Affordable Care Act, under Medicare and part of the new Massachusetts cost-cutting law — there’s little evidence that the practice is effective and it may in fact “do harm.”

Here’s the release, emailed to media by the single-payer advocacy group, Physicians For a National Health Program (which was co-founded by two of the editorial authors, Dr. David Himmelstein and Dr. Steffie Woolhandler, visiting professors at Harvard Medical School. They write that PNHP played no role in supporting their research):

The editorial, echoing a theme of the accompanying article, says there’s very little evidence that P4P has improved patient survival or any other measure of public health.

“Despite a dearth of robust evidence that P4P is clinically effective in health care, payers charge ahead with implementing everywhere an intervention that has proven to work nowhere,” the authors write.

Worse still, there is mounting evidence – reinforced by the latest findings in behavioral economics – that such schemes may actually do harm, the authors say.

For example, doctors and nurses may perceive detailed, overly prescriptive financial P4P contracts as “controlling,” which can cause them to dissociate from their work, lose their intrinsic motivation to do their very best for the patient, and engage in gaming – the medical equivalent of “teaching to the test.”

According to the authors, such gaming – e.g. “upcoding” a diagnosis to another condition that yields a higher payment – is already rife. For instance, labeling a pneumonia patient’s condition as “complex” rather than “simple” can increase the hospital’s payment by 42 percent. Continue reading

Should Your Doctor Grade You And Pay You For Good Health?


In health care circles, “pay for performance” for doctors is a hot topic. But how about pay for performance for patients? Wouldn’t that be the ultimate “skin in the game?” (Aside from our literal skin, that is.) Isn’t it what many employer wellness programs are doing, or beginning to do, already? Why not use money as both carrot and stick to induce better health behaviors? And is that enough questions for one introduction?

Dr. Steward Segal, an Illinois family physician, has a provocative post on about his plan to create “PP4P” — patient pay for performance. He writes:

Recently, I have reassessed my P4P stance and believe that a system that pays patients for performance could work.  Yes, “patient pay for performance (PP4P)” would be a good thing.  As I envision PP4P, patients would be given performance guidelines and be graded on adherence to treatment plans, consistency in taking medications, participation in timely follow up visits, weight loss, and appropriate exercise.  Of course, there are many other performance standards that could be set for patients depending on what ails them.

A diabetic could be graded on his/her blood sugar control.  A patient with hypertension could be graded on his average blood pressure.  An obese patient could be graded on continued weight loss.  Paying patients for performance makes a lot of sense.  All we need is a grading system.

Dr. Segal writes that he’s developing that system, and “It’s time to grade patients so that those with low grades can realize the errors of their ways and have a chance to improve their performance.”

Readers? Would you want to be one of Dr. Segal’s patients?

Pay-For-Performance May Not Pay Off, Study Finds


By Martha Bebinger

Medicare has spent tens of millions of dollars since 2004 paying doctors for improved care. But a new report published in the New England Journal of Medicine finds no difference for patients.

The new study by researchers at the Harvard School of Public Health says incentives paid to doctors — what’s known as pay for performance — made no difference in mortality rates for more than six million patients. Lead author Ashish Jha says it may be that doctors weren’t paid enough to compel change or that the payments weren’t based on meaningful measures

“A lot of us believe that paying for performance is a good thing but how we do it is still something we don’t understand,” he said.

The study has broad implications as private insurers adopt pay for performance programs as well. “We found no evidence that the largest hospital-based pay-for-performance program led to a decrease in 30-day mortality,” the study concludes. “Expectations of improved outcomes for programs modeled after Premier HQID should therefore remain modest.”

Here’s more analysis of the new study by Kaiser Health News.