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The Tougher the Better: An Economic Analysis of Increased Payment Thresholds on the Performance of General Practices

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  • Yan Feng
  • Ada Ma
  • Shelley Farrar
  • Matt Sutton

Abstract

We investigate whether and how a change in performance‐related payment motivated General Practitioners (GPs) in Scotland. We evaluate the effect of increases in the performance thresholds required for maximum payment under the Quality and Outcomes Framework in April 2006. A difference‐in‐differences estimator with fixed effects was employed to examine the number of patients treated under clinical indicators whose payment schedules were revised and to compare these with the figures for those indicators whose schedules remained unchanged. The results suggest that the increase in the maximum performance thresholds increased GPs' performance by 1.77% on average. Low‐performing GPs improved significantly more (13.22%) than their high‐performing counterparts (0.24%). Changes to maximum performance thresholds are differentially effective in incentivising GPs and could be used further to raise GPs' performance across all indicators. Copyright © 2013 John Wiley & Sons, Ltd.

Suggested Citation

  • Yan Feng & Ada Ma & Shelley Farrar & Matt Sutton, 2015. "The Tougher the Better: An Economic Analysis of Increased Payment Thresholds on the Performance of General Practices," Health Economics, John Wiley & Sons, Ltd., vol. 24(3), pages 353-371, March.
    • Handle: RePEc:wly:hlthec:v:24:y:2015:i:3:p:353-371
    DOI: 10.1002/hec.3022
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    4. Hugh Gravelle & Matt Sutton & Ada Ma, 2010. "Doctor Behaviour under a Pay for Performance Contract: Treating, Cheating and Case Finding?," Economic Journal, Royal Economic Society, vol. 120(542), pages 129-156, February.
    5. Stephen Morris & Rosalind Goudie & Matt Sutton & Hugh Gravelle & Robert Elliott & Arne Risa Hole & Ada Ma & Bonnie Sibbald & Diane Skåtun, 2011. "Determinants of general practitioners' wages in England," Health Economics, John Wiley & Sons, Ltd., vol. 20(2), pages 147-160, February.
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    1. Oxholm, Anne Sophie & Kristensen, Søren Rud & Sutton, Matt, 2018. "Uncertainty about the effort–performance relationship in threshold-based payment schemes," Journal of Health Economics, Elsevier, vol. 62(C), pages 69-83.

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