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Researchers question pay-for-performance schemes

by Brendon Nafziger , DOTmed News Associate Editor
Rewarding doctors for doing good things and cutting out bad ones seems like a no-brainer, but researchers writing in the current issue of the British Medical Journal say pay-for-performance schemes might undermine physician motivation and are often based on flimsy evidence.

Pay-for-performance schemes, which tie financial incentives to meeting certain quality objectives, are becoming more popular, according to the authors. At least 170 initiatives have been started in the United States. Similar programs exist in the United Kingdom and Australia.

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But in their paper, the researchers say that there's often little reliable evidence that most programs work over the long-term, save health systems money, or actually better patient outcomes.

"The evidence on whether financial incentives are more effective than other interventions is often weak and poorly reported," wrote the researchers, led by Paul P. Glasziou, a professor with the Center for Research in Evidence-Based Practice at Bond University in Queensland, Australia.

Gaming the system

A big worry is that instead of resulting in better patient outcomes, such programs merely encourage doctors to game the system. For instance, in programs that reward doctors for risk-adjusted mortality and morbidity results, doctors could engage in "upcoding," massaging the reimbursement codes to make patients seem sicker than they are to qualify for higher payments.

Outright data manipulation is another concern. A 2005 study cited by the researchers found that 16 percent of English emergency rooms studied directly tweaked their ER data to make it seem like they met a four-hour discharge target.

In an accompanying editorial, a trio of U.S. economists and public health experts warn that possibly the bigger problem with pay-for-performance schemes is that they rest on "flawed assumptions" of human motivation.

"Performance based pay may increase output for straightforward manual tasks," wrote Steffie Woolhandler, a professor at City University of New York, Dan Ariely a professor of psychology and behavioral economics at Duke University, and David U. Himmelstein, also a professor at City University. "However, a growing body of evidence from behavioral economics and social psychology indicates that rewards can undermine motivation and worsen performance on complex cognitive tasks, especially when motivation is high to begin with."

The checklist

Still, if policymakers are going to go ahead with pay-for-performance schemes, the Australian economists developed a nine-point checklist to help them avoid some of the pitfalls inherent in these programs.

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