Paying for Performance

Implementing a Statewide Project in California

Published in: Quality Management in Health Care, v. 14, no. 2, Apr./June 2005, p. 66-79

Posted on RAND.org on January 01, 2005

by Cheryl L. Damberg, Kristiana Raube, Thomas R. Williams, Stephen M. Shortell

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The US health care system falls far short of providing care consistent with national standards of care and available knowledge. In 2002, the Robert Wood Johnson Foundation (RWJ) and the California HealthCare Foundation (CHCF) funded 7 demonstration projects under the Rewarding Results program to implement and evaluate financial and nonfinancial incentives for quality. The largest is the Integrated Healthcare Association's (IHA) Pay for Performance (P4P) program, which currently covers over 6.5 million or close to one quarter of all Californians. This article describes the implementation of the IHA P4P program and explores the difficult decisions and collaborative structures that were created to make statewide P4P a reality in California. In contrast to several of the other Rewarding Results P4P demonstrations that involve only one health plan, this project is unique in that it involves multiple, competing commercial health plans in a large statewide initiative, thus representing the kind and scale of interorganizational coordination that may be needed to have substantial impact.

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