A review of pay-for-performance programs in the inpatient sector in OECD countries

Background: Across the member countries of the Organisation for Economic Co-operation and Development (OECD), pay-for-performance (P4P) programs have been implemented in the inpatient sector to improve the quality of care provided by hospitals. However, little is known about whether such programs can live up to expectations. Thus far, evaluations and reviews have focused on the ambulatory care sector in Anglo-Saxon countries. The transferability of lessons learned to the inpatient sector, however, is limited. Objectives: We aimed to provide an overview of existing P4P programs in the inpatient sector in the OECD countries and to assemble information on their effects. Furthermore, we attempted to identify whether evaluations of such programs allow preliminary conclusions to be drawn about the effects of P4P. Methods: We conducted a structured literature search in five databases to identify relevant sources in Danish, English, French, German, Hebrew, Italian, Japanese, Korean, Norwegian, Spanish, Swedish and Turkish. This was complemented by desk-based research. In selected cases, we contacted experts to validate our results and to add further information. Our research was restricted to the inpatient sector in OECD countries. Results: We identified 30 P4P programs in 14 OECD countries. The programs were very heterogeneous in their design. First, they catered to different aims. Some programs followed a narrow approach and focused on improving the quality of care for a single medical condition, whereas others aimed at improving the quality of inpatient care more broadly. Second, the programs blended structural, process and outcome measures that targeted different stages of inpatient care pathways. Third, the financial rewards were designed in various ways. Programs based their rewards either on an absolute or a relative score. Incentives included payment withholds, penalties, bonuses, or a combination thereof. The size of the incentive often amounted to approximately 0.1% of a hospital’s budget or less, and never exceeded 4%. Lastly, the results of published evaluations of the P4P programs ranged from no effect to moderately positive effects. In cases where evaluations had positive results, the effect was seldom sustained and the causalities were unclear. Conclusion: The results of our review indicate that P4P has been widely adopted across the OECD and become an integral part of the inpatient sector. The programs are very heterogeneous. The impact of P4P is unclear, and it may be that the moderately positive effects seen for some programs can be attributed to side effects, such as public reporting and increased awareness of data recording. Policy makers must decide whether the potential benefits of introducing a P4P program outweigh the potential risks within their particular national or regional context, and should be aware that P4P programs have yet not lived up to expectations.