Will Financial Incentives Stimulate Quality Improvement?

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Published in: American Journal of Medical Quality, v. 21, no. 6, Nov.-Dec. 2006, p. 367-374

Posted on RAND.org on December 31, 2005

by Stephanie S. Teleki, Cheryl L. Damberg, Chau Pham, Sandra H. Berry

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Pay-for-performance is being applied at the physician level to stimulate improvements in quality of care and cost efficiency; however, little is known about how physicians will respond. The authors interviewed physicians exposed to a financial incentive program in California to identify possible barriers to the successful application of financial incentives by exploring physicians' opinions of and experiences with pay-for-performance programs. Reasons physicians cited for quality deficiencies included insurance coverage limitations and lack of patient compliance, time, and proper physician oversight. Physicians believe that they play a significant role and have a moderate to high degree of control over quality of care and that it is important to self-monitor. Physicians expressed the need for accurate and timely data, peer comparisons, and more patient time, staff support, and consultations with colleagues to successfully monitor and deliver quality care. Many support increased pay for delivering high-quality care but question measurement accuracy, bonus payment financing, and health plan involvement.

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