Sustainability of quality improvement following removal of pay-for-performance incentives

Abstract

Background: Although pay-for-performance (P4P) has become a central strategy for improving quality in US healthcare, questions persist about the effectiveness of these programs. A key question is whether quality improvement that occurs as a result of P4P programs is sustainable, particularly if incentives are removed.

Objective: To investigate sustainability of performance levels following removal of performance-based incentives.

Design, setting, and participants: Observational cohort study that capitalized on a P4P program within the Veterans Health Administration (VA) that included adoption and subsequent removal of performance-based incentives for selected inpatient quality measures. The study sample comprised 128 acute care VA hospitals where performance was assessed between 2004 and 2010.

Intervention: VA system managers set annual performance goals in consultation with clinical leaders, and report performance scores to medical centers on a quarterly basis. These scores inform performance-based incentives for facilities and their managers. Bonuses are distributed based on the attainment of these performance goals.

Measurements: Seven quality of care measures for acute coronary syndrome, heart failure, and pneumonia linked to performance-based incentives.

Results: Significant improvements in performance were observed for six of seven quality of care measures following adoption of performance-based incentives and were maintained up to the removal of the incentive; subsequently, the observed performance levels were sustained.

Limitations: This is a quasi-experimental study without a comparison group; causal conclusions are limited.

Conclusion: The maintenance of performance levels after removal of a performance-based incentive has implications for the implementation of Medicare's value-based purchasing initiative and other P4P programs. Additional research is needed to better understand human and system-level factors that mediate sustainability of performance-based incentives.

Figure 1.

Graph of latent growth model analyses for seven performance measures. Dependent variable is the number of patients who receive guideline-adherent care divided by the number of eligible patients. Trend lines are estimated for each year to demonstrate how the trend changes over time. Arrows indicate the point at which incentives are either introduced or removed. Dashed lines indicate periods in which performance-based incentives were removed. Significant slopes are indicated by larger point size lines.