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Can you get what you pay for? Pay‐for‐performance and the quality of healthcare providers

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  • Kathleen J. Mullen
  • Richard G. Frank
  • Meredith B. Rosenthal

Abstract

Despite the popularity of pay‐for‐performance (P4P) among health policy makers and private insurers as a tool for improving quality of care, there is little empirical basis for its effectiveness. We use data from published performance reports of physician medical groups contracting with a large network HMO to compare clinical quality before and after the implementation of P4P, relative to a control group. We consider the effect of P4P on both rewarded and unrewarded dimensions of quality. In the end, we fail to find evidence that a large P4P initiative either resulted in major improvement in quality or notable disruption in care.

Suggested Citation

  • Kathleen J. Mullen & Richard G. Frank & Meredith B. Rosenthal, 2010. "Can you get what you pay for? Pay‐for‐performance and the quality of healthcare providers," RAND Journal of Economics, RAND Corporation, vol. 41(1), pages 64-91, March.
    • Handle: RePEc:bla:randje:v:41:y:2010:i:1:p:64-91
    DOI: 10.1111/j.1756-2171.2009.00090.x
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    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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