IDEAS home Printed from https://ideas.repec.org/a/ucp/amjhec/v4y2018i1p105-130.html
   My bibliography  Save this article

Incentive Design and Quality Improvements: Evidence from State Medicaid Nursing Home Pay-for-Performance Programs

Author

Listed:
  • R. Tamara Konetzka

    (Department of Public Health Sciences, University of Chicago)

  • Meghan M. Skira

    (Department of Economics, University of Georgia Author email: skira@uga.edu)

  • Rachel M. Werner

    (Division of General Internal Medicine, University of Pennsylvania; Center for Health Equity Research and Promotion, Crescenz VA Medical Center)

Abstract

Pay-for-performance (P4P) programs have become a popular policy tool aimed at improving health-care quality. We analyze how incentive design affects quality improvements in the nursing home setting, where several state Medicaid agencies have implemented P4P programs that vary in incentive structure. Using the Minimum Data Set and the Online Survey, Certification, and Reporting data from 2001 to 2009, we examine how the weights put on various performance measures that are tied to P4P bonuses, such as clinical outcomes, inspection deficiencies, and staffing levels, affect improvements in those measures. We find larger weights on clinical outcomes often lead to larger improvements, but small weights can lead to no improvement or worsening of some clinical outcomes. We find a qualifier for P4P eligibility based on having few or no severe inspection deficiencies is more effective at decreasing inspection deficiencies than using weights, suggesting simple rules for participation may incent larger improvement.

Suggested Citation

  • R. Tamara Konetzka & Meghan M. Skira & Rachel M. Werner, 2018. "Incentive Design and Quality Improvements: Evidence from State Medicaid Nursing Home Pay-for-Performance Programs," American Journal of Health Economics, University of Chicago Press, vol. 4(1), pages 105-130, Winter.
    • Handle: RePEc:ucp:amjhec:v:4:y:2018:i:1:p:105-130
    as

    Download full text from publisher

    File URL: https://www.journals.uchicago.edu/doi/pdf/10.1162/ajhe_a_00095
    Download Restriction: Access to PDF is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. 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.
    2. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
    3. Martin Emmert & Frank Eijkenaar & Heike Kemter & Adelheid Esslinger & Oliver Schöffski, 2012. "Economic evaluation of pay-for-performance in health care: a systematic review," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 13(6), pages 755-767, December.
    4. Frank Eijkenaar, 2013. "Key issues in the design of pay for performance programs," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 14(1), pages 117-131, February.
    5. Eijkenaar, Frank & Emmert, Martin & Scheppach, Manfred & Schöffski, Oliver, 2013. "Effects of pay for performance in health care: A systematic review of systematic reviews," Health Policy, Elsevier, vol. 110(2), pages 115-130.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eijkenaar, Frank & Emmert, Martin & Scheppach, Manfred & Schöffski, Oliver, 2013. "Effects of pay for performance in health care: A systematic review of systematic reviews," Health Policy, Elsevier, vol. 110(2), pages 115-130.
    2. Domenico Lisi & Luigi Siciliani & Odd Rune Straume, 2020. "Hospital competition under pay‐for‐performance: Quality, mortality, and readmissions," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 29(2), pages 289-314, April.
    3. Brosig-Koch, Jeannette & Hennig-Schmidt, Heike & Kairies-Schwarz, Nadja & Wiesen, Daniel, 2016. "Physician performance pay: Evidence from a laboratory experiment," Ruhr Economic Papers 658, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    4. Panayotis Constantinou & Jonathan Sicsic & Carine Franc, 2017. "Effect of pay-for-performance on cervical cancer screening participation in France," International Journal of Health Economics and Management, Springer, vol. 17(2), pages 181-201, June.
    5. Brosig-Koch, Jeannette & Groß, Mona & Hennig-Schmidt, Heike & Kairies-Schwarz, Nadja & Wiesen, Daniel, 2021. "Physicians' incentives, patients' characteristics, and quality of care: A systematic experimental comparison of fee-for-service, capitation, and pay for performance," Ruhr Economic Papers 923, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    6. Lina Maria Ellegård & Jens Dietrichson & Anders Anell, 2018. "Can pay‐for‐performance to primary care providers stimulate appropriate use of antibiotics?," Health Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 39-54, January.
    7. Iezzi, Elisa & Lippi Bruni, Matteo & Ugolini, Cristina, 2014. "The role of GP's compensation schemes in diabetes care: Evidence from panel data," Journal of Health Economics, Elsevier, vol. 34(C), pages 104-120.
    8. Bingxiao Wu, 2014. "Mismeasurement in Pay-for-Performance: Evidence from an Intervention to Reduce Health Care Spending in China," Departmental Working Papers 201409, Rutgers University, Department of Economics.
    9. Jonathan Sicsic & Carine Franc, 2017. "Impact assessment of a pay-for-performance program on breast cancer screening in France using micro data," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 18(5), pages 609-621, June.
    10. Susan Feng Lu, 2012. "Multitasking, Information Disclosure, and Product Quality: Evidence from Nursing Homes," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 21(3), pages 673-705, September.
    11. Herbst, T. & Foerster, J. & Emmert, M., 2018. "The impact of pay-for-performance on the quality of care in ophthalmology: Empirical evidence from Germany," Health Policy, Elsevier, vol. 122(6), pages 667-673.
    12. Michele Fioretti & Hongming Wang, 2023. "Performance Pay in Insurance Markets: Evidence from Medicare," The Review of Economics and Statistics, MIT Press, vol. 105(5), pages 1128-1144, September.
    13. Ammi, Mehdi & Fortier, Grant, 2017. "The influence of welfare systems on pay-for-performance programs for general practitioners: A critical review," Social Science & Medicine, Elsevier, vol. 178(C), pages 157-166.
    14. Sun-Moon Jung & Jae Yong Shin, 2022. "Social Performance Incentives in Mission-Driven Firms," Management Science, INFORMS, vol. 68(10), pages 7631-7657, October.
    15. Fuhai Hong & Tanjim Hossain & John A. List & Migiwa Tanaka, 2018. "Testing The Theory Of Multitasking: Evidence From A Natural Field Experiment In Chinese Factories," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 59(2), pages 511-536, May.
    16. Nadja Kairies-Schwarz & Claudia Souček, 2020. "Performance Pay in Hospitals: An Experiment on Bonus–Malus Incentives," IJERPH, MDPI, vol. 17(22), pages 1-29, November.
    17. Carmen Carpio & Natalia Santiago Bench, 2015. "The Health Workforce in Latin America and the Caribbean," World Bank Publications - Books, The World Bank Group, number 22027.
    18. Henry Eyring, 2020. "Disclosing Physician Ratings: Performance Effects and the Difficulty of Altering Ratings Consensus," Journal of Accounting Research, Wiley Blackwell, vol. 58(4), pages 1023-1067, September.
    19. Galina Besstremyannaya & Sergei Golovan, 2019. "Physician’s altruism in incentive contracts: Medicare’s quality race," CINCH Working Paper Series 1903, Universitaet Duisburg-Essen, Competent in Competition and Health.
    20. repec:spo:wpecon:info:hdl:2441/2ioennpq5m90holakkatq7cmms is not listed on IDEAS
    21. repec:spo:wpmain:info:hdl:2441/4bg68glinb8r8roh0akvprtu9u is not listed on IDEAS
    22. Lina Maria Ellegård, 2020. "Effects of pay-for-performance on prescription of hypertension drugs among public and private primary care providers in Sweden," International Journal of Health Economics and Management, Springer, vol. 20(3), pages 215-228, September.

    More about this item

    Keywords

    pay-for-performance; nursing home quality; long-term care; incentive design;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:amjhec:v:4:y:2018:i:1:p:105-130. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/AJHE .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.