Pay for Performance Essay

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Pay-for-Performance Jamie D Knutter HCS/531: Health Care Organizations and Delivery Systems October 1st, 2012 Instructor: Doreen Gounaris Pay-for-Performance “Pay for performance has become a central strategy in the drive to improve health care” (Joynt, Jha, Orav, & Epstein, 2012, p. 1606). There are many aspects of pay-for-performance. These aspects include; effects of reimbursement by this approach, the impact cost reductions has on quality and efficiency of health care, the affects to the providers and patients, the effect on the future of health care. Currently an estimate of half of all Medicaid programs operated with a form of the pay-for-…show more content…
This approach makes for a competitive aspect amongst health care providers also (Wiscombe, 2001). Reimbursements are greatly affected by the pay-for-performance approach. “Most P4P approaches adjust payments to hospitals, individual physicians, networks of physicians or medical practice groups” (Mayes & Walradt, 2011, p. 39). Ways that reimbursements are given are; bonuses based on percentage of care delivered, bonus payments per patient with high quality of care, and a percentage of the total cost savings achieved in relation to what cost would have been without high quality of care (Mayes & Walradt, 2011). Tying financial incentives to care provided is an approach improving the quality of care (Joynt, Jha, Orav, & Epstein, 2012). “The policy of tying financial incentives to the quality of performance has strong face validity that is, paying for better care should promote improvements in quality and, ideally, lead to better patient outcomes” (Joynt, Jha, Orav, & Epstein, 2012, p. 1606). One study found that greater than half of pay-for-performance hospitals attained higher performance scores and greater patient quality (Werner, Kolstad, Stuart, & Polsky, 2011). These findings suggest that this approach may have the greatest effect on quality of health care (Werner, Kolstad, Stuart, & Polsky, 2011). This approach is lowering costs over the long haul by increasing
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