Are alternative payment models the answer to the failures of pay-for-performance?

Over the past two decades most healthcare systems have modified the way they pay providers to attach financial incentives directly to quality of care. This type of payment, often referred to as pay for performance, gained momentum in the early 2000s, following several studies highlighting concerns about the quality and safety of healthcare systems.1 However, the evidence suggests they have been largely ineffective in improving quality. In response, health payers in various countries have introduced alternative payment models that encourage more effective, efficient, and integrated healthcare. We examine the early evidence on these alternative models and consider what they can realistically achieve.Failures of pay-for-performance modelsPay-for-performance models were introduced to improve measurement of quality in health systems, and importantly, to counter the general lack of accountability among clinicians and healthcare institutions to meaningfully improve the care they deliver to patients. Many attributed poor quality to the lack of incentives for high…
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