Quality-enhancing incentive initiatives for hospital care: policy implications and management requirements

During the last decades, in many countries retrospective payment systems for hospital care have been replaced by prospective payment methods, mainly DRG-based ones. The latter, though encouraging a more efficient use of hospital resources, present several undesired effects, some of which are likely to jeopardise the quality of care. The aim of the paper is to examine the main issues in designing and implementing an effective scheme of financial incentives for enhancing quality of hospital care. The main international experiences regarding the adoption of hospital performance-based incentives as well as the existing empirical evidence on their capacity to effectively boost quality of care are also critically analysed. Finally, some managerial remarks are considered in order to provide indications for the concrete implementation process and to contribute to the definition of a quality-enhancing incentive scheme well suited to the peculiarities of each organisation system.