Show Summary Details

Page of

PRINTED FROM the OXFORD RESEARCH ENCYCLOPEDIA, ECONOMICS AND FINANCE (oxfordre.com/economics). (c) Oxford University Press USA, 2020. All Rights Reserved. Personal use only; commercial use is strictly prohibited (for details see Privacy Policy and Legal Notice).

date: 27 October 2020

Abstract and Keywords

Pay-for-performance programs have become a prominent supply-side intervention to improve quality and decrease spending in health care, touching upon long-term care, acute care, and outpatient care. Pay-for-performance directly targets long-term care, with programs in nursing homes and home health. Indirectly, pay-for-performance programs targeting acute care settings affect clinical practice for long-term care providers through incentives for collaboration across settings.

As a whole, pay-for-performance programs entail the identification of problems it seeks to solve, measurement of the dimensions it seeks to incentivize, methods to combine and translate performance to incentives, and application of the incentives to reward performance. For the long-term care population, pay-for-performance programs must also heed the unique challenges specific to the sector, such as patients with complex health needs and distinct health trajectories, and be structured to recognize the challenges of incentivizing performance improvement when there are multiple providers and payers involved in the care delivery.

Although empirical results indicate modest effectiveness of pay-for-performance in long-term care on improving targeted measures, some research has provided more clarity on the role of pay-for-performance design on the output of the programs, highlighting room for future research. Further, because health care is interconnected, the indirect effects of pay-for-performance programs on long-term care is an underexplored topic. As the scope of pay-for-performance in long-term care expands, both within the United States and internationally, pay-for-performance offers ample opportunities for future research.

Keywords: pay-for-performance, value-based purchasing, long-term care, nursing homes, home health, quality of care, financial incentives, health economics

Access to the complete content on Oxford Research Encyclopedia of Economics and Finance requires a subscription or purchase. Public users are able to search the site and view the abstracts and keywords for each book and chapter without a subscription.

Please subscribe or login to access full text content.

If you have purchased a print title that contains an access token, please see the token for information about how to register your code.

For questions on access or troubleshooting, please check our FAQs, and if you can''t find the answer there, please contact us.