An Environmental Scan of Pay for Performance in the Hospital Setting: Final Report. Payment Structure


The majority of P4P program sponsors advocated making the program as positive as possible. In this spirit, they suggested focusing on collaboration and rewards and avoiding financial withholds, which are viewed as punitive. This sentiment is consistent with the principle of framing noted in our review of economic theories in Chapter 2. Program sponsors found a more positive, collaborative approach yields the best results in terms of quality improvement. Sponsors also recommended rewarding improvement in combination with top performance to keep all hospitals engaged. Many sponsors believe that it is important to “spread the wealth” by rewarding top performers and also incentivizing the lowest performers to improve. Some sponsors also suggested supporting or rewarding participation in regional continuous quality improvement (CQI) efforts to improve systems of care. One sponsor noted that quality improvement efforts may best be served by focusing on systems of care, rather than relying on the current “one off” model of tracking performance on individual measures. They recommended expanding the focus of hospital P4P programs to include rewards for participating in quality improvement efforts at the system level.

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