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The Effects of Financial Incentives on Quality of Care: The Case of Diabetes

Author

Listed:
  • Scott, A
  • Schurer, S
  • Jensen, P H
  • Sivey, P

Abstract

Australia introduced an incentive payment scheme for general practitioners to ensure systematic and high quality care in chronic disease management. There is little empirical evidence and ambiguous theoretical guidance on which effects to expect on the quality of care. This paper evaluates the impact of the payment incentives on quality of care in diabetes, as measured by the probability of ordering an HbA1c test. The empirical analysis is conducted with a unique data set and a multivariate probit model to control for the simultaneous self-selection process of practices into the payment scheme and larger practices. The study finds that the incentive reform had a positive effect on quality of care in diabetes management and that participation in the scheme is facilitated by the support of Divisions of General Practice.

Suggested Citation

  • Scott, A & Schurer, S & Jensen, P H & Sivey, P, 2008. "The Effects of Financial Incentives on Quality of Care: The Case of Diabetes," Health, Econometrics and Data Group (HEDG) Working Papers 08/15, HEDG, c/o Department of Economics, University of York.
    • Handle: RePEc:yor:hectdg:08/15
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    Cited by:

    1. Gertler, Paul & Vermeerch, Christel, 2013. "Using Performance Incentives to Improve Medical Care Productivity and Health Outcomes," Institute for Research on Labor and Employment, Working Paper Series qt9qn9q7ph, Institute of Industrial Relations, UC Berkeley.
    2. Lina Maria Ellegård & Jens Dietrichson & Anders Anell, 2018. "Can pay‐for‐performance to primary care providers stimulate appropriate use of antibiotics?," Health Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 39-54, January.
    3. Gianluca Fiorentini & Elisa Iezzi & Matteo Lippi Bruni & Cristina Ugolini, 2011. "Incentives in primary care and their impact on potentially avoidable hospital admissions," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 12(4), pages 297-309, August.
    4. Anthony Scott & Peter Sivey, 2022. "Motivation and competition in health care," Health Economics, John Wiley & Sons, Ltd., vol. 31(8), pages 1695-1712, August.
    5. Karinna Saxby & Yuting Zhang, 2025. "Do Rurality‐Based Financial Incentives Improve Equity of Primary Healthcare Access? Evidence From Australia," Health Economics, John Wiley & Sons, Ltd., vol. 34(9), pages 1679-1690, September.
    6. de Walque, Damien & Gertler, Paul J. & Bautista-Arredondo, Sergio & Kwan, Ada & Vermeersch, Christel & de Dieu Bizimana, Jean & Binagwaho, Agnès & Condo, Jeanine, 2015. "Using provider performance incentives to increase HIV testing and counseling services in Rwanda," Journal of Health Economics, Elsevier, vol. 40(C), pages 1-9.
    7. 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.
    8. Gravelle, Hugh & Liu, Dan & Propper, Carol & Santos, Rita, 2019. "Spatial competition and quality: Evidence from the English family doctor market," Journal of Health Economics, Elsevier, vol. 68(C).
    9. Daniel Jones & Mirco Tonin & Michael Vlassopoulos, 2018. "Paying for what kind of Performance? Performance Pay and Multitasking in Mission-Oriented Jobs," CESifo Working Paper Series 7156, CESifo.
    10. Sergey Shishkin & Aleksandr Temnitsky, 2017. "From Salary to the Performance-Based Remuneration of Russian Physicians: How Motivation at Work is Changing," HSE Working papers WP BRP 08/PSP/2017, National Research University Higher School of Economics.
    11. Nolan, Anne, 2019. "Reforming the delivery of public dental services in Ireland: potential cost implications," Research Series, Economic and Social Research Institute (ESRI), number RS80.
    12. Sarah Karlsberg-Schaffer;Jon Sussex;Yan Feng, 2015. "Incentives to follow Best Practice in Health Care," Briefing 001583, Office of Health Economics.
    13. Karinna Saxby & Joshua Byrnes & Sonja C. de New & Son Nghiem & Dennis Petrie, 2023. "Does affirmative action reduce disparities in healthcare use by Indigenous peoples? Evidence from Australia's Indigenous Practice Incentives Program," Health Economics, John Wiley & Sons, Ltd., vol. 32(4), pages 853-872, April.
    14. World Bank, 2015. "A Roadmap to Achieve Social Justice in Health Care in Egypt," World Bank Publications - Reports 21891, The World Bank Group.
    15. Pantelidis, Pantelis & Vozikis, Athanassios & Meggouli, Eirini, 2019. "Strategies to prioritize prevention in the Greek primary healthcare system," MPRA Paper 92103, University Library of Munich, Germany.
    16. Anthony Scott & William Coote, 2010. "Do regional primary‐care organisations influence primary‐care performance? A dynamic panel estimation," Health Economics, John Wiley & Sons, Ltd., vol. 19(6), pages 716-729, June.
    17. Diop, Mamadou & Fiset-Laniel, Julie & Provost, Sylvie & Tousignant, Pierre & Borgès Da Silva, Roxane & Ouimet, Marie-Jo & Latimer, Eric & Strumpf, Erin, 2017. "Does enrollment in multidisciplinary team-based primary care practice improve adherence to guideline-recommended processes of care? Quebec’s Family Medicine Groups, 2002–2010," Health Policy, Elsevier, vol. 121(4), pages 378-388.
    18. Lippi Bruni, Matteo & Nobilio, Lucia & Ugolini, Cristina, 2009. "Economic incentives in general practice: The impact of pay-for-participation and pay-for-compliance programs on diabetes care," Health Policy, Elsevier, vol. 90(2-3), pages 140-148, May.
    19. Sicsic, Jonathan, 2014. "Impacts des incitatifs économiques en médecine générale : Analyse des préférences et des motivations des médecins," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/14625 edited by Franc, Carine.

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    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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