The impact of removing financial incentives from clinical quality indicators: Longitudinal analysis of four Kaiser Permanente indicators

Abstract

Objective: To evaluate the effect of financial incentives on four clinical quality indicators common to pay for performance plans in the United Kingdom and at Kaiser Permanente in California. Design: Longitudinal analysis. Setting: 35 medical facilities of Kaiser Permanente Northern California, 1997-2007. Participants: 2 523 659 adult members of Kaiser Permanente Northern California. Main outcomes measures: Yearly assessment of patient level glycaemic control (HbA1c <8%), screening for diabetic retinopathy, control of hypertension (systolic blood pressure <140 mm Hg), and screening for cervical cancer. Results: Incentives for two indicators - screening for diabetic retinopathy and for cervical cancer - were removed during the study period. During the five consecutive years when financial incentives were attached to screening for diabetic retinopathy (1999-2003), the rate rose from 84.9% to 88.1%. This was followed by four years without incentives when the rate fell year on year to 80.5%. During the two initial years when financial incentives were attached to cervical cancer screening (1999-2000), the screening rate rose slightly, from 77.4% to 78.0%. During the next five years when financial incentives were removed, screening rates fell year on year to 74.3%. Incentives were then reattached for two years (2006-7) and screening rates began to increase. Across the 35 facilities, the removal of incentives was associated with a decrease in performance of about 3% per year on average for screening for diabetic retinopathy and about 1.6% per year for cervical cancer screening. Conclusion: Policy makers and clinicians should be aware that removing facility directed financial incentives from clinical indicators may mean that performance levels decline.