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Performance-Based Health Care Provider Payments- Health Cost Containment
Updated November 2012
The following NCSL Issue brief has been distributed to legislators and legislative staff across the country.
Performance-Based Health Care Provider Payments- PDF File
Colorado Supplement: Performance-Based Health Care Provider Payments - PDF File
To read portable document format (.pdf) files, use Adobe Acrobat Reader.
Cost Containment Strategy and Logic
Pay-for-performance is a system of payment that rewards health care plans and providers for achieving or exceeding preestablished benchmarks for quality of care, health results and/or efficiency. Pay-for-performance is most often used to encourage providers to follow recommended guidelines or meet treatment goals for high-cost conditions (e.g., heart disease) or preventive care (e.g., immunizations). A physician might, for example, receive a year-end $25 bonus for every 2-year-old on the physician’s panel if at least 80 percent have received recommended immunizations. A hospital may receive a performance payment for reducing the rate of avoidable hospital readmissions or ensuring that patients receive appropriate discharge medications. Performance awards can take many forms, including bonuses, enhanced fee schedules and more enrollees directed to high-performing providers and health plans.
Summary of Health Cost Containment and Efficiency Strategies - Brief #6- Performance-Based Health Care Provider Payments
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State/Private Sector Examples |
Strategy Description |
Target of Cost Containment |
Evidence of Effect on Costs |
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Maryland, Minnesota, Medicaid programs, Bridges to Excellence |
Payments to providers for
meeting preestablished health
status, efficiency and/or quality
benchmarks for a group of patients. |
Providers not financially rewarded for providing efficient, effective preventive and chronic care.
Unnecessary care. |
Research is limited and indicates some
improvements in quality of care but little effect on costs. |
Additional Resources
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About this project
NCSL’s Health Cost Containment and Efficiency Series will describe two dozen alternative policy approaches, with an emphasis on documented and fiscally calculated results. The project is housed at the NCSL Health Program in Denver, Colorado. It is led by Richard Cauchi (Program Director) and Martha King (Group Director) with Barbara Yondorf as lead researcher.
NCSL gratefully acknowledges the financial support for this publication series from The Colorado Health Foundation and Rose Community Foundation of Denver, Colorado.
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Issues & Resources
Find the NCSLstaff member who handles the issue in which you are interested.
NCSLprovides access to current state and federal legislation and a comprehensive list of state documents, including state statutes, constitutions, legislative audits and research reports.
Members
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| ©2013 National Conference of State Legislatures. All Rights Reserved. |
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