Pay-for-performance may not improve quality

One solution gaining momentum to improve physician quality is the pay-for-performance approach. A recent study, however, found that this model rewards physicians with higher baseline performance but does not necessarily improve quality (JAMA 2005;294:1788-1793).

Meredith B. Rosenthal, Ph.D., of the Harvard School of Public Health and colleagues evaluated a pay-for-performance plan involving nearly 300 large physician organizations in California, inquiring about their rates of cervical cancer screening, mammography, and hemoglobin A1c testing.

During the first year of the program, the plan awarded $3.4 million (27% of the amount set aside) in bonus payments. For all three measures, physician groups that performed at or above the threshold for receipt of a bonus improved the least but received the greatest share of the bonus payments.