Another Study of Pay for Performance in Hospitals

It is such an attractive idea isn’t it. Pay more to hospitals that save more lives and penalise those that do not. Well that is exactly what the Centers for Medicare and Medicaid Services has been doing in the USA for the past few years with respect to just three medical conditions: myocardial infarction (heart attack), pneumonia, and heart failure. A three-year follow up study has now been reported comparing 2,919 participating hospitals with 1,348 control hospitals – there are a lot of hospitals in the US.[1] The main comparisons: 1) intervention vs. control hospitals; and 2) three targeted conditions vs. other conditions in the intervention hospitals. No effects were observed; intervention hospitals did no better than controls and, across interventions hospitals, the targeted conditions found no better than those that were not targeted. This finding is different to the short, but not long-term, results of a study in England,[2] [3] though this study was based on payment for compliance with process measures not outcome. The CLAHRC WM Director posits two reasons for the null result in the American study. First, mortality is insensitive to care quality.[4-6] Second, incentives work if ‘agents’ (people targeted by the incentive) think they can influence the outcome. So this is the CLAHRC WM Director’s theory – incentivise specific actions (i.e. process), not outcome, and never use hospital-wide mortality as a quality measure.

— Richard Lilford, CLAHRC WM Director


  1. Figueroa JF, Tsugawa Y, Zheng T, Orav EJ, Jha AK. Association between the Value-Based Purchasing pay for performance program and patient mortality in US hospitals: observational study. BMJ. 2016; 353: i2214.
  2. Lindenauer PK, Remus D, Roman S, et al. Public reporting and pay for performance in hospital quality improvement. N Engl J Med. 2007; 356: 486-96.
  3. Kristensen SR, Meacock R, Turner AJ, et al. Long-term effect of hospital pay for performance on mortality in England. N Engl J Med. 2014; 371: 540-8.
  4. Girling AJ, Hofer TP, Wu J, Chilton PJ, et al. Case-mix adjusted hospital mortality is a poor proxy for preventable mortality: a modelling study. BMJ Qual Saf. 2012; 21(12): 1052-6.
  5. Lilford R, Mohammed MA, Spiegelhalter D, Thomson R. Use and misuse of process and outcome data in managing performance of acture medical care: avoiding institutional stigma. Lancet. 2004; 363: 1147-54.
  6. Lilford R, Pronovost P. Using hospital mortality rates to judge hospital performance: a bad idea that just won’t go away. BMJ. 2010; 340: c2016.

2 thoughts on “Another Study of Pay for Performance in Hospitals”

  1. That is not to say that looking at the quality of care in patients who die is not worthwhile. Where I work the quality of care as reflected by referral and interventions from palliative care services has been transformed after mortality data demonstrated insufficient input. At the same time the data recognise that very large numbers of the population come to the hospital because it is the best available place to die. Should acute hospitals be hospices -only until there are enough hospices to meet the need.

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