An Environmental Scan of Pay for Performance in the Hospital Setting: Final Report. Findings from the Literature Review


As of June 2007, few peer-reviewed studies existed on the use of financial incentives to affect quality, patient experience, safety, or the efficient use of resources. While more than 40 hospital-based P4P programs are operating in the U.S., few of them are undergoing formal evaluations to assess their impact. 

The nine articles in our review address the impact of three separate hospital P4P programs in which formal evaluations have been occurring: 

  1. The Hawaii Medical Service Association (HMSA) P4P Program 
  2. The Blue Cross Blue Shield (BCBS) of Michigan Hospital Incentive Program
  3. The PHQID.
Table 3: Summary of Design Features of P4P Programs Contained in Published Evaluation Studies
Hospital P4P Program
Type of Measures
Type of Performance Target
Form of Financial Incentive
  Outcome Process Structure
Patient Experience
Patient Safety
Absolute Relative
HMSA X X X X   X X X    
BCBS of Michigan   X X   X X X X    
PHQID X X     X   X X   X

Table 3 presents a high-level summary of key design features of each of these three P4P programs. Table 4 provides descriptive data on the evaluation studies. More detailed findings from our evaluation are in the following subsections.

P4P Program
Type of Study
Change in Performance
Control Group
Table 4: Summary of Evaluation Studies Examining Hospital P4P Programs
HMSA P4P Program Berthiaume et al., 2004 Describes uptake of one component of program and how many dollars were dispensed No No
Berthiaume et al., 2006 Describes trends in measures Yes No
BCBS of Michigan Hospital Incentive Program Nahra et al., 2006 Cost-effectiveness analysis Yes No
Sautter et al. 2007 Qualitative interviews with leadership of 10 participating hospitals NA* No
Reiter, Nahra, and Wheeler, 2006 Survey of participating hospitals to track behavioral responses No No
PHQID Premier White Paper Describes improvements in quality measures Yes No
Grossbart, 2006 Evaluates improvements in quality versus a “matched” control group Yes Yes
Lindenauer et al., 2007 Evaluates improvements in quality versus a “matched” control group Yes Yes
Glickman et al., 2007 Evaluate improvements in quality versus a control group Yes Yes
Note to Table Four: Change in performance was used to select hospitals for the interviews and not the outcome examined by the research.

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