An Analysis of Pay-for-Performance Schemes and Their Potential Impacts on Health Systems and Outcomes for Patients

Abstract

Pay-for-performance (P4P) programs have been introduced into the Canadian medical system in the last decades. This paper examines the underlying characteristics of P4P and describes both their advantages and drawbacks. Most P4P programs provide the advantage of rewarding medical acts, thus providing an incentive to take on complex patients. There is a variety of nuanced P4P initiatives, which provide financial incentive according to differing criteria, based on quality measures, incentives, and/or benchmark structures. However, there is no conclusive evidence demonstrating that P4P programs provide better value for money than traditional pay schemes, regardless of particular structural choices. Some evidence has even shown that P4P may be detrimental, especially in disadvantaged and high-risk populations. Additionally, there are a number of ethical and practical concerns that arise with the use of P4P, such as the risk of financial incentives being misused or misinterpreted and patients being refused or referred during treatment. P4P initiatives require careful examination and the creation of solid, evidence-based criteria for evaluation and implementation in Canadian medical systems.