Early Experience with Pay-for-Performance: From Concept to Practice

Growing optimism over the promise of "pay for performance" to improve the quality of health care may have been given further impetus following publication of the first study to assess the effects of quality incentives in a large health plan. With support from The Commonwealth Fund, researchers examining a pay-for-performance program implemented by PacifiCare Health Systems -- one of the nation's largest health plans -- found that for one of three clinical quality measures studied, a physician network that was offered bonus payments outperformed another network that was not. As reported in "Early Experience with Pay-for-Performance: From Concept to Practice" (Journal of the American Medical Association, Oct. 12, 2005), physicians who were part of the incentive program performed the same or slightly better on the other two measures, though the difference between the two groups was not significant, said the study's lead author, Meredith B. Rosenthal, Ph.D., of the Harvard School of Public Health. While improvement in quality was modest, the bonuses were also modest, and improvement was assessed over a relatively short period of time (five quarters), the researchers noted.

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