Are performance-based payment structures more strongly correlated with better health outcomes compared to solely fee-for-service payment for surgeons?

For years, the healthcare industry has compensated its surgeons with a simple fee-for-service model. With more payment structures becoming prevalent, we decided to review one specific type of payment structure, pay-for-performance, and its impact on patient health outcomes. We hypothesized that, on average, across all specialties, performance-based contracts would yield better health outcomes compared to fee-for-service payments alone. We also hypothesized that performance-based contracts might pressure physicians to get results and could lead to mistakes and a worse quality of care. We reviewed nine papers from 2006-2014, of which the majority were conducted in the United States, with one each from Italy and Germany. Our review included three literary/systematic reviews, three before & after studies, and two cross-sectional analyses. Many papers did not provide strong evidence of the effect of pay-for-performance on health outcomes, although examined papers agree on certain things. A common theme we found was the pay-for-performance increased documentation and the number of procedures done, but with minimal conclusions about outcomes. This may result from poor or non-standardized metrics being used to measure and report “performance.” However, two studies found that pay-for-performance improved patient health outcomes, despite limitations.  For example, Brosig-Koch et al., (2013) found that P4P was not cost-effective from a solely financial standpoint.