Pay-for-Performance Debate: Not Seeing the Forest for the Trees

Abstract

The Potential Health System Benefits of P4P Concerns Around the Current P4P Debate Moving Forward References Over the past 10 to 15 years, results-based financing (RBF) has gained increased prominence in global health. Though the term RBF encompasses a variety of demandand supplyside incentives to increase output or enhance access and quality, the focus of this special issue and our commentary is on incentives that target service providers. In high-income countries including the UK, France, and the United States these types of incentives are typically referred to as pay-for-performance (P4P), defined as financial incentives to hospitals, physicians, and other health care providers “aimed at improving the quality, efficiency, and overall value of health care.” The term performance-based financing (PBF) has acquired a wider use in lowand middle-income countries (LMICs) and refers to supply-side financial incentives where payment depends explicitly on quantity of services delivered and “on the degree to which services are of approved quality, as specified by protocols for processes and outcomes.” PBF may not only target health facilities but also include ministries of health, local governments, provincial and district health teams, and central medical stores. Though terminologies may differ, at their core, PBF or P4P is a provider payment mechanism, which uses information on provider activities and the health needs of the population they serve to drive resource allocation in order to maximize societal objectives. For purposes of this commentary, we will use the term P4P to refer to this mechanism. In this commentary, we argue that it is crucial to pay greater attention to the “forest”—that is, overall health system reforms and how provider payment arrangements interact with these to influence health outcomes, as opposed to looking almost solely and more narrowly at the “trees”—that is, the details and impact of a P4P mechanism divorced from the underlying health system. P4P is a category of strategic purchasing, the effectiveness of which depends critically on its connections with the wider environment of purchaser– provider relations. In the following paragraphs, we unpack the potential health system benefits of P4P. Next, we briefly Received 28 January 2017; revised 1 March 2017; accepted 2 March 2017. *Correspondence to: Elina Dale; Email: dalee@who.int 2017 World Health Organization. Published by Taylor & Francis. This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 IGO License, which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is properly cited, and is not altered, transformed, or built upon in any way. This article shall not be used or reproduced in association with the promotion of commercial products, services or any entity. There should be no suggestion that the World Health Organization (WHO) endorses any specific organization, products or services. The use of the WHO logo is not permitted. This notice should be preserved along with the article’s original URL.