Do financial incentives hurt performance?

Adding to the mixed reviews of financial incentives, a BMJ group analysis of seven pay-for-performance studies raises questions about whether pay for performance works, The Boston Globe reports.

The researchers looked at research published in the April Health Affairs that found pay for performance failed to improve quality at low-performing hospitals. They also reviewed a March New England Journal of Medicine study that found the program failed to improve mortality rates, which were similar regardless of whether hospitals participated in the bonus program.

Given the findings, the researchers note that financial incentive programs "can undermine motivation and worsen performance." That's because the system alters the outlook for "good doctoring" by providing financial incentives to doctors, rather than enhancing their intrinsic desire to help their patients, according to the research announcement.

The researchers also warn that providers easily game pay-for-performance systems. For example, providers can change their reporting practices to boost their quality scores, noted the Globe.

So before implementing pay-for-performance systems, the researchers recommend healthcare organizations use a checklist to evaluate potential benefits and pitfalls, such as asking if metrics used to determine success match the patient outcomes the system is addressing, according to an accompanying editorial.

To learn more:
- read the Boston Globe article
- here's the BMJ analysis, editorial and research announcement

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