Pay for performance

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In health care delivery, pay for performance, also called incentive reimbursement, is "a scheme which provides reimbursement for the health services rendered, generally by an institution, and which provides added financial rewards if certain conditions are met. Such a scheme is intended to promote and reward increased efficiency and cost containment, with better care, or at least without adverse effect on the quality of the care rendered."[1]

Pay for performance is an important component of health care reform.

Studies of effectiveness

Controlled studies show conflicting results.[2][3][4][5]

Major ecological studies of pay for performance.[2][3]
Trial Hospitals Intervention Comparison Outcome Results Comment
Intervention Control
Sutton et al[2]
24 English hospitals compared to 132 control hospitals
Bonuses averaged $312,000
"hospital leadership agreed to invest awarded money internally toward efforts to improve clinical care"
No intervention 30-day in-hospital mortality for patients admitted for pneumonia, heart failure, or acute myocardial infarction Baseline: 20.9%
Follow-up: 20.1%
Baseline: 13.1%
Follow-up: 12.1%
Hospitals included in the program had higher baseline mortality.
207 hospitals that voluntarily participated in the HQID project among 613 hospitals that voluntarily participated in a CMS Hospital Quality Alliance (HQA)project for public reporting of outcomes
Bonuses that averaged $71,960 per year per hospital (for two years) No intervention 30-day mortality after 6 years for admitted for pneumonia, heart failure, acute myocardial infarction or coronary artery bypass 11.8% 11.6%  


  1. Anonymous (2021), Pay for performance (English). Medical Subject Headings. U.S. National Library of Medicine.
  2. 2.0 2.1 2.2 Sutton M, Nikolova S, Boaden R, Lester H, McDonald R, Roland M (2012). "Reduced mortality with hospital pay for performance in England.". N Engl J Med 367 (19): 1821-8. DOI:10.1056/NEJMsa1114951. PMID 23134382. Research Blogging.
  3. 3.0 3.1 3.2 Lindenauer PK, Remus D, Roman S, Rothberg MB, Benjamin EM, Ma A et al. (2007). "Public reporting and pay for performance in hospital quality improvement.". N Engl J Med 356 (5): 486-96. DOI:10.1056/NEJMsa064964. PMID 17259444. Research Blogging.
  4. 4.0 4.1 Jha AK, Joynt KE, Orav EJ, Epstein AM (2012). "The long-term effect of premier pay for performance on patient outcomes.". N Engl J Med 366 (17): 1606-15. DOI:10.1056/NEJMsa1112351. PMID 22455751. Research Blogging.
  5. Scott A, Sivey P, Ait Ouakrim D, Willenberg L, Naccarella L, Furler J et al. (2011). "The effect of financial incentives on the quality of health care provided by primary care physicians.". Cochrane Database Syst Rev (9): CD008451. DOI:10.1002/14651858.CD008451.pub2. PMID 21901722. Research Blogging.