Abstract
BACKGROUND: Although pay-for-performance (P4P) has become a central strategy for improving quality in US healthcare, questions persist about the effectiveness of these programs. A key question is whether quality improvement that occurs as a result of P4P programs is sustainable, particularly if incentives are removed. OBJECTIVE: To investigate sustainability of performance levels following removal of performance-based incentives. DESIGN, SETTING, AND PARTICIPANTS: Observational cohort study that capitalized on a P4P program within the Veterans Health Administration (VA) that included adoption and subsequent removal of performance-based incentives for selected inpatient quality measures. The study sample comprised 128 acute care VA hospitals where performance was assessed between 2004 and 2010. INTERVENTION: VA system managers set annual performance goals in consultation with clinical leaders, and report performance scores to medical centers on a quarterly basis. These scores inform performance-based incentives for facilities and their managers. Bonuses are distributed based on the attainment of these performance goals. MEASUREMENTS: Seven quality of care measures for acute coronary syndrome, heart failure, and pneumonia linked to performance-based incentives. RESULTS: Significant improvements in performance were observed for six of seven quality of care measures following adoption of performance-based incentives and were maintained up to the removal of the incentive; subsequently, the observed performance levels were sustained. LIMITATIONS: This is a quasi-experimental study without a comparison group; causal conclusions are limited. CONCLUSION: The maintenance of performance levels after removal of a performance-based incentive has implications for the implementation of Medicare's value-based purchasing initiative and other P4P programs. Additional research is needed to better understand human and system-level factors that mediate sustainability of performance-based incentives.