Physician Pay-For-Performance: Implementation and Research Issues

Recent research underscores the gaps that exist between evidence-based medical practices and the care that many patients actually receive. Recognizing this, large purchasers are experimenting with new reimbursement arrangements called pay-for-performance (P4P) that tie a portion of payments for physician services to measures of quality. Agency theory, from the discipline of economics, provides a perspective on the challenges P4P is likely to encounter. The focus of most P4P initiatives on medical group performance raises additional questions about its potential effectiveness as a catalyst for change.