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Can you get what you pay for? Pay-for-performance and the quality of healthcare providers

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  • Kathleen J. Mullen
  • Richard G. Frank
  • Meredith B. Rosenthal

Abstract

Despite the popularity of pay-for-performance (P4P) among health policy makers and private insurers as a tool for improving quality of care, there is little empirical basis for its effectiveness. We use data from published performance reports of physician medical groups contracting with a large network HMO to compare clinical quality before and after the implementation of P4P, relative to a control group. We consider the effect of P4P on both rewarded and unrewarded dimensions of quality. In the end, we fail to find evidence that a large P4P initiative either resulted in major improvement in quality or notable disruption in care. Copyright (c) 2010, RAND.

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Bibliographic Info

Article provided by RAND Corporation in its journal The RAND Journal of Economics.

Volume (Year): 41 (2010)
Issue (Month): 1 ()
Pages: 64-91

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Handle: RePEc:bla:randje:v:41:y:2010:i:1:p:64-91

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References

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  1. Uri Gneezy & Aldo Rustichini, 2000. "Pay Enough Or Don'T Pay At All," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 791-810, August.
  2. Glied, Sherry & Zivin, Joshua Graff, 2002. "How do doctors behave when some (but not all) of their patients are in managed care?," Journal of Health Economics, Elsevier, vol. 21(2), pages 337-353, March.
  3. David Dranove & Daniel Kessler & Mark McClellan & Mark Satterthwaite, 2002. "Is More Information Better? The Effects of 'Report Cards' on Health Care Providers," NBER Working Papers 8697, National Bureau of Economic Research, Inc.
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Cited by:
  1. Burgess, Simon & Propper, Carol & Ratto, Marisa & Tominey, Emma, 2012. "Incentives in the Public Sector: Evidence from a Government Agency," CEPR Discussion Papers 9071, C.E.P.R. Discussion Papers.
  2. Frank Eijkenaar, 2013. "Key issues in the design of pay for performance programs," The European Journal of Health Economics, Springer, vol. 14(1), pages 117-131, February.
  3. C. Kirabo Jackson & Henry S. Schneider, 2013. "Reducing Moral Hazard in Employment Relationships: Experimental Evidence on Managerial Control and Performance Pay," NBER Working Papers 19645, National Bureau of Economic Research, Inc.
  4. Richard G. Frank, 2005. "The health care challenge: some perspectives from behavioral economics," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 50(Jun), pages 61-75.
  5. Fiorentini, Gianluca & Lippi Bruni, Matteo & Ugolini, Cristina, 2013. "GPs and hospital expenditures. Should we keep expenditure containment programs alive?," Social Science & Medicine, Elsevier, vol. 82(C), pages 10-20.
  6. David M. Cutler, 2005. "What is good care, and what is bad?," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 50(Jun), pages 46-59.
  7. E. Iezzi & M. Lippi Bruni & C. Ugolini, 2011. "The role of GP’s compensation schemes in diabetes care: evidence from panel data," Working Papers wp766, Dipartimento Scienze Economiche, Universita' di Bologna.
  8. Lorens A. Helmchen & Anthony T. Lo Sasso, 2010. "How sensitive is physician performance to alternative compensation schedules? Evidence from a large network of primary care clinics," Health Economics, John Wiley & Sons, Ltd., vol. 19(11), pages 1300-1317.
  9. Jeannette Brosig-Koch & Heike Hennig-Schmidt & Nadja Kairies & Daniel Wiesen, 2013. "How Effective are Pay-for-Performance Incentives for Physicians? – A Laboratory Experiment," Ruhr Economic Papers 0413, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  10. Keser, Claudia & Schnitzler, Cornelius, 2013. "Money talks: Paying physicians for performance," Center for European, Governance and Economic Development Research Discussion Papers 173, University of Goettingen, Department of Economics.
  11. Eijkenaar, Frank & Emmert, Martin & Scheppach, Manfred & Schöffski, Oliver, 2013. "Effects of pay for performance in health care: A systematic review of systematic reviews," Health Policy, Elsevier, vol. 110(2), pages 115-130.
  12. William D. Nordhaus, 2005. "Costs, benefits, and rationing of health care: comments on Cutler’s “What Is Good Care, and What Is Bad?”," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 50(Jun), pages 77-87.
  13. Lewis, Maureen & Pettersson, Gunilla, 2009. "Governance in health care delivery : raising performance," Policy Research Working Paper Series 5074, The World Bank.
  14. Grant Miller & Kimberly Singer Babiarz, 2013. "Pay-for-Performance Incentives in Low- and Middle-Income Country Health Programs," NBER Working Papers 18932, National Bureau of Economic Research, Inc.
  15. Mark Dusheiko & Hugh Gravelle & Stephen Martin & Nigel Rice & Peter Smith, . "Does better disease management in primary care reduce hospital costs? Evidence from English primary care," Discussion Papers 11/15, Department of Economics, University of York.

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