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The aim of pay‐for‐performance (P4P) systems is to financially reward health care providers for delivering care that meets pre‐defined targets for quality or outcome indicators. P4P health care funding has been used overseas in the expectation that providing incentives to adhere to evidence‐based practice and discouraging low value care will economically improve clinical outcomes. In Australia, P4P has been introduced in primary care (the Practice Incentive Program), and also as a form of penalty‐based P4P in public hospitals, in that hospital episodes that include “sentinel events” (serious, wholly preventable adverse events) are not funded. The private health insurer Medibank has similarly listed 165 hospital‐acquired complications for which it does not reimburse treatment costs for private hospital patients. Despite widespread use, information on the overall impact of hospital P4P programs on the value of health care is limited.

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Authors: Rohan Grimley, Joosup Kim, Helen M Dewey, Nadine E Andrew, Taya A Collyer, Eleanor S Horton, Greg Cadigan and Dominique A Cadilhac

Article Type: Research