Perspective:

Payment-for-performance programs aim to improve efficiency in health care. In particular, they focus on reducing variations in health care, improving processes in relation to safety and quality, and increasing productivity of systems. These variations may be related to supplier-induced demand created by clinical autonomy and uncertainty about ‘what works’ in health care. A few of the programs aim directly to reward health care outcomes. While it is essential that these payment-for-performance efforts continue, it is equally essential that these efforts are well designed and executed so that they provide evidence not only of the effectiveness, but also of the cost-effectiveness of these investments. The pursuit of this knowledge will illuminate the relative efficiency of bonuses and penalties, reputational and financial incentives, and other issues relevant to these measures.