Rewarding Results Pay-for-Performance: Lessons for Medicare

March 1, 2008

Ever since 2001, when the Institute of Medicine recommended that public and private purchasers of health care build stronger incentives to enhance quality, there has been a proliferation of pay-for-performance (P4P) demonstrations.1 But despite this growth in new initiatives for quality-based incentive programs for hospitals, physicians, nursing homes and home health providers, there is limited evidence of the effectiveness of early private-sector demonstration projects.2 As efforts to link reimbursement and performance continue to increase, a careful review of the lessons learned from early initiatives should be an important component of the design, implementation and evaluation of any new P4P initiatives.