Purchasing Primary Care Services for Quality Chronic Care: Capitation With Performance Payments in Four Countries

Improving quality of care for chronic conditions is central to addressing the large burden of premature mortality from non‐communicable diseases. This paper presents the main results from case studies of health care purchasing arrangements in Chile, China, Indonesia and South Africa, which involved paying providers of primary care services using capitation with performance pay to improve service quality and health outcomes for chronic conditions. In all four settings, changes to payment methods were accompanied by other enabling interventions to provide incentives to deliver health services in a better way, such as training and non‐financial incentives. However, the incentives in these programs were insufficient to drive significant changes in provider behaviour needed to improve quality. Design and implementation challenges included voluntary enrolment, quality metrics, performance targets, risk adjustment, payment certainty and levels, and withholding payments. The design and implementation challenges contributed to low patient volume or provider programme uptake resulting in lower‐than‐expected effects. The findings from this analysis underscore the importance of adjusting quality measures for patient health risk and complexity to avoid penalising health care providers for accepting patients with higher health risks. Relative or progressive quality targets may be more appropriate where wide diversity in providers' capacities exist, particularly in national programs, and may be used to encourage gradual quality improvements over time. Uncertainty about timing and levels of payment may have also undermined impact. Withholding performance payments as a penalty may reduce resources for quality improvements in these settings.