Pay for Performance: Where's The Return?

BACKGROUND: Pay for performance (P4P) initiatives are designed to foster and reward improvement in health care delivery. These programs promote “value-based health care” by rewarding quality care that is characterized by a reduced amount of disproportionate spending. OBJECTIVE: To review the intent and design of P4P initiatives as well as the design and results of P4P programs in current practice. SUMMARY: Three key principles are fundamental to building a value-based health care system: measurement, transparency, and accountability. There are several levers currently driving P4P, each influencing the movement in its own way. Among these are employers, federal agencies such as the Centers for Medicare & Medicaid Services and the Department of Health and Human Services, health plans, providers, accreditors, and Congress. One key player in the P4P movement, the National Committee for Quality Assurance (NCQA), is a private, independent nonprofit health care quality oversight organization that measures and reports on health care quality and unites diverse groups around a common goal: improving health care quality. NCQA, has demonstrated several successful provider-level measurement initiatives connected to P4P programs, notable among them Bridges to Excellence programs in several markets, physician recognition programs, the Integrated Healthcare Association’s P4P initiative in California, the National Forum on Performance Benchmarking of Physician Offices and Organizations, and health plan accreditation. CONCLUSIONS: The initial data from developmental P4P programs across the nation have indicated that both financial and nonfinancial incentives motivate significant change in health care delivery, but the return on investment of these initiatives is not yet known.