Creating better performance incentives

P4P programs suffer from several flaws


Many performance improvement programs try to create a higher value health system by incentivizing physicians and health systems to behave in particular ways. These have often been pay-for-performance programs that offer bonuses or impose penalties depending on how providers perform on various metrics.

“In theory, this makes sense,” said Dhruv Khullar, MD, MPP, lead author of a JAMA article about the future of incentives, and assistant professor at Weill Cornell Medicine in New York. “But in practice, these programs have not been successful in consistently improving quality, and sometimes they have been counterproductive. In our article, we argued that focusing too narrowly on financial rewards is not the right strategy to improve health system performance – and is sometimes at odds with the physician professionalism and what really motivates most clinicians.”

Pay-for-performance programs suffer from several fundamental flaws: they focus too narrowly on financial incentives and use centralized accountability instead of local culture, for example, Dr. Khullar said.

“A better future state would involve capitalizing on physician professionalism through nonfinancial rewards, resources for quality improvement, team-based assessments, and emphasizing continuous learning and organizational culture,” he noted. Performance programs would take a more global view of clinical care by emphasizing culture, teams, trust, and learning. Such a system would allow hospitalists and other physicians to worry less about meeting specific metrics and focus more on providing high-quality care to their patients.

“I would hope physicians, payers, and administrators would reconsider some previously held beliefs about quality improvement, especially the idea that better quality requires giving people bonus payments or imposing financial penalties,” Dr. Khullar said. “We believe the next wave of performance improvement programs should entertain other paths to better quality, which are more in line with human motivation and physician professionalism.”


1. Khullar D, Wolfson D, Casalino LP. Professionalism, Performance, and the Future of Physician Incentives. JAMA. 2018 Nov 26 (Epub ahead of print). doi: 10.1001/jama.2018.17719. Accessed Dec. 11, 2018.

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