If you’re thinking about partnering with other providers in a pay-for-performance (P4P) project, consider the impact on outcomes and any unintended negative consequences of financial incentives, suggests an analysis and editorial published in the Aug. 15 issue of peer-reviewed medical journal BMJ.

The analysis, by a group of Australian researchers, features a 6-point checklist the academics say should be applied to any financial incentive program before it’s implemented (Sample questions: Does it improve patient outcomes? Will financial incentives work better than other kinds of incentives? Will benefits outweigh unintended harmful effects, such as providers gaming the system or shifting resources from a medically necessary service to another just to reap the incentive pay?)

Policy-makers shouldn’t set the size of an incentive or how it should be paid until they determine that such payments will actually work, the researchers say. 

Meanwhile, in a separate BMJ editorial, a group of U.S. academics from New York and Duke universities worry that pay for performance would effectively increase output for “straightforward, manual tasks,” but “undermine motivation and worsen performance” for more complex cognitive tasks (such as a physician’s medical decision-making).

The Americans warn that widespread P4P incentives could lead to provider “gaming” practices such as “aggressive coding,” where a hospital will embellish diagnoses to maximize payments.

P4P programs don’t have checks in place to keep a hospital from ginning up the diagnosis codes for its patients to make them look sicker than they really are, the editorial states. For example, there’s the case of a Maryland rehab hospital that “reportedly urged doctors to document ‘protein malnutrition’ in patients’ charts,” enabling the facility to bill for 287 cases of ‘kwashiorkor’ in 2007 (up from 0 in 2004).”

And most P4P programs don’t take into account difficult or disadvantaged patients, who may make providers look bad on outcomes reports when, for example, they don’t take their medicine or their conditions don’t improve, the editorial states. A 2010 Rand study considered the prospect that P4P would result in less care for these patients, as providers gravitated toward patients that would give them better P4P scores and higher incentive payments.

Conclusion: The jury is still out on whether P4P will markedly improve patient outcomes and the health of Americans overall, the academics say.