Thursday, February 19, 2015

Why Pay for Performance will never work in healthcare

In order to get doctors to practise evidence-based medicine, administrators are trying to implement P4P ( pay for performance) schemes which incentivise doctors by rewarding them for doing "the right thing". This sounds very logical - after all, doctors are homo economicus, and will respond rationally to financial incentives. However, P4P is doomed to fail .

"  To the best of my knowledge, no controlled scientific study has ever found a long-term enhancement of the quality of work as a result of any incentive system. In fact, numerous studies have confirmed that performance on tasks, particularly complex tasks, is generally lower when people are promised a reward for doing them, or for doing them well. As a rule, the more prominent or enticing the reward, the more destructive its effects."

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