Pay for Performance in Primary Care in England and California: Comparison of Unintended Consequences

Abstract

PURPOSEWe undertook an in-depth exploration of the unintended consequences of pay-for-performance programs In England and California. METHODSWe interviewed primary care physicians in California (20) and England (20) and compared unintended consequences in each setting. Interview recordings were transcribed verbatim and subjected to thematic analysis. RESULTSUnintended consequences reported by physicians varied according to the incentive program. English physicians were much more likely to report that the program changed the nature of the offi ce visit. This change was linked to a larger number of performance measures and heavy reliance on electronic medical records, with computer prompts to facilitate the delivery of performance measures. Californian physicians were more likely to express resentment about pay for performance and appeared less motivated to act on fi nancial incentives, even in the program with the highest rewards. The inability of Californian physicians to exclude individual patients from performance calculations caused frustration, and some physicians reported such undesirable behaviors as forced disenrollment of noncompliant patients. English physicians are assessed using data extracted from their own medical records, whereas in California assessment mostly relies on data collected by multiple third parties that may have different quality targets. Assessing performance based on these data contributes to feelings of resentment, lack of understanding, and lack of ownership reported by Californian physicians.CONCLUSIONS Our study fi ndings suggest that unintended consequences of incentive programs relate to the way in which these programs are designed and implemented. Although unintended, these consequences are not necessarily unpredictable. When designing incentive schemes, more attention needs to be paid to factors likely to produce unintended consequences. Ann Fam Med 2009;7:121-127. DOI: 10.1370/afm.946. INTRODUCTIONT o improve health care quality, payers are increasingly using fi nancial incentives to reward physicians and medical groups that meet specifi c performance targets. There has been a rapid recent growth in the number of these pay-for-performance programs, which provide fi nancial incentives for quality improvement, in primary health care. 122 PAY F O R P ER F O R M A NC Emultispecialty medical groups and independent practice associations, or IPAs,5,6 which contract with health plans on their behalf), and incentive payments are made to these larger organizations as opposed to individual physicians or practices. In England, payments are made directly to practices, which are mostly groups of between 1 and 10 primary care physicians. These payments contribute as much as 30% of practice income. In most (but not all) of the California settings, the amount received by physicians is much lower.Although pay-for-performance programs may deliver on their stated goals, 7,8 they could have unintended effects on other aspects of care or on physician motivation. These effects include...

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