Pay for performance in the inpatient sector: A review of 34 P4P programs in 14 OECD countries

Abstract

Across the member countries of the Organisation for Economic Co-operation and Development (OECD), pay-for-performance (P4P) programs have been implemented in the inpatient sector to improve the quality of care provided by hospitals. This paper provides an overview of 34 existing P4P programs in the inpatient sector in 14 OECD countries based on a structured literature search in five databases to identify relevant sources in Danish, English, French, German, Hebrew, Italian, Japanese, Korean, Norwegian, Spanish, Swedish and Turkish. It assembles information on the design and effects of these P4P systems and discusses whether evaluations of such programs allow preliminary conclusions to be drawn about the effects of P4P. The programs are very heterogeneous in their aim, the selection of indicators and the design of financial rewards. The impact of P4P is unclear and it may be that the moderately positive effects seen for some programs can be attributed to side effects, such as public reporting and increased awareness of data recording. Policy makers must decide whether the potential benefits of introducing a P4P program outweigh the potential risks within their particular national or regional context, and should be aware that P4P programs have yet not lived up to expectations.

Keywords: Hospital; Pay-for-performance; Provider payment; Quality of care.