Pay for performance in health care in Australia – research and opinion

The UK and New Zealand have introduced pay-for-performance programs into their primary health care systems. Australian organisations have researched and published reviews and opinions which look at whether these systems are applicable in our system.

Australian Policy Online

APO research pay-for-performance-in-health-in-australiatook a comparative approach to exploring pay-for-performance schemes in England and New Zealand, to test the relevance of Kingdon’s Multiple Streams Framework and other theoretical approaches to explain policy variation and change. The results demonstrated that Kingdon’s Framework failed to predict the patterns of non-incremental change observed or the importance of institutional factors such as ownership and governance arrangements for public services, interest group structure and historical antecedents seen in the two policymaking processes.

The research found that the use of bargaining in England and not in New Zealand was the reason for major differences in speed, scope and outcomes of the two pay-for-performance schemes. It concluded that the Kingdon’s Multiple Streams Framework needed to be enhanced to improve its relevance for such jurisdictions.

Royal Australian College of General Practitioners (RACGP)

RACGP stated in its review that although pay-for-performance programs in primary care appear to have an effect on the behaviour of general practitioners, there is little evidence that these programs in their current form improve health outcomes or healthcare system quality. There are potential unintended consequences of this system, including around ‘gaming’ where practitioners manipulate results in order to maximise performance.

While the programs are attractive to funders as they provide increased transparency and evidence of activity, it is important to note that a relatively underfunded capitation systems in the UK—where there are significant increase in overall funding and a pay increase for GP—is different from a fee-for-service setting such as Australia.

Australian Healthcare and Hospitals Association (AHHA)

AHHA through its Deeble Institute issues brief emphasised that there is no single measure that will drive efficiency, quality and safety. Current pay-for-performance programs focus on clinical and organisational measures, but there are other aspects that are less easily quantified such as continuity of care, ease of access to care, strength of the patient-doctor relationship and patient satisfaction.

According to the AHHA, the decision to expand pay-for-performance remains a political decision as there is not enough high-quality evidence indicating these types of programs result in value for money. There would be substantial costs and risks involved that must be measured against the potential quality, safety and financial benefits, which are not guaranteed.

Medical Journal of Australia

Ian A Scott from Department of Internal Medicine and Clinical Epidemiology, Princess Alexandra Hospital, in his article published in the Medical Journal of Australia proposed specific approach to pay-for-performance in Australia:

  • Phased approach starting with “pay-for-participation” schemes in which participants focus on the development and testing of robust, standardised and preferably nationally consistent performance measures, only then should there be moves towards “pay-for-performance”
  • Pilot demonstration programs adopting this phased approach could be funded over a 3–4 year period, in different geographical and clinical settings in both public and private sectors
  • Program design should target hospitals and clinician groups, reward all high-quality care, include predominantly process measures with a select few unambiguous outcome measure, provide flexible payments for both capital purchases and provider incentives linked to future performance guarantees
  • All pay-for-performance programs should have an appropriate governance structure comprising clinicians, health managers, quality improvement methodologists, and data managers/analysts, with advice being sought from health economists and epidemiologists

Primary Health Care Research & Information Service (PHCRIS)

In a more recent review of RESEARCH ROUNDup, PHCRIS examined pay-for-performance in the Australian primary health care context. Australia’s first experiments with pay-for-performance began with the introduction of Practice Incentive Payments (PIP) and Service Incentive Payments (SIP). However, a review identified serious limitations in the current incentive payments, including: high administrative burden and payments not being well targeted to the complexity and intensity of services that are required.

The PHCRIS article also provided lessons from systematic reviews which reported evidence of unintended consequences, including less attention to care processes that were not incentivised. However, the review also noted that there are positive effects, such as performance targets that are achievable and easy to track, strong infrastructure, alignment with organisational goals, and public report.

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