An Environmental Scan of Pay for Performance in the Hospital Setting: Final Report. Calls for System Reform

11/01/2007

The 2001 IOM report Crossing the Quality Chasm called upon policymakers in the public and private sectors to make reforms that would address problems of quality and inefficiencies. A key reform recommended by the IOM was to create financial incentives for quality and to make performance information transparent to ensure public accountability. More recently, the IOM made specific recommendations for implementing payment rewards for performance within Medicare in its 2006 report titled Rewarding Provider Performance: Aligning Incentives in Medicare. Additionally, the Medicare Payment Advisory Commission (MedPAC), which advises the U.S. Congress on issues related to the Medicare program, has recommended that Medicare adopt pay for performance (P4P) across various settings, including Medicare Advantage plans and dialysis providers and hospitals, home health agencies, and physicians (MedPAC, 2005). 

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