Hot Topic--Developing Pay-for-Performance Programs

“Paying for performance” is a health care financing strategy that is gaining momentum. At its essence, a pay-for-performance program rewards health care providers, including physicians and hospitals, for improving the quality of care they provide to patients.

Pay-for-performance programs are multi-faceted and their implementation is complex. Some private payers have initiated pay-for-performance systems and Congress is contemplating repealing its current formula for calculating Medicare physician payments and replacing it with a system under which physicians would be compensated for meeting certain quality thresholds.

HCFO research helps to inform policymakers who are debating the merits of this evolving payment strategy.

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