Pay for performance

Health Management Glossary

Quality Management

Definition. Pay for performance (P4P) is a payment approach that rewards providers for achieving predefined quality or efficiency targets.

Explanation

P4P relies on quality indicators and public reporting, so measurement methods matter: changing the statistical method alone can change hospital and surgeon rankings in cardiac surgery report cards (Glance et al., 2006).

Evidence on P4P is mixed. Risks include gaming, selection of low-risk patients and neglect of unmeasured care.

Related concepts

Quality indicator Value-based healthcare Benchmarking Health financing

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References

Glance, L. G., Dick, A., Osler, T. M., Li, Y., & Mukamel, D. B. (2006). Impact of changing the statistical methodology on hospital and surgeon ranking: The case of the New York State cardiac surgery report card. Medical Care, 44 (4), 311–319. http://www.jstor.org/stable/3768323

Cite this entry: Kurutkan, M. N. (2026). Pay for performance. In The Health Topics glossary. https://healthtopic.org/glossary/pay-for-performance/

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