Analysis

When financial incentives do more good than harm: a checklist

BMJ 2012; 345 doi: http://dx.doi.org/10.1136/bmj.e5047 (Published 14 August 2012) Cite this as: BMJ 2012;345:e5047
  1. Paul P Glasziou, professor1,
  2. Heather Buchan, director of implementation support2,
  3. Chris Del Mar, professor1,
  4. Jenny Doust, professor 1,
  5. Mark Harris, professor 3,
  6. Rosemary Knight, associate professor3,
  7. Anthony Scott, professorial fellow4,
  8. Ian A Scott, director of internal medicine5,
  9. Alexis Stockwell, research programme manager6
  1. 1Centre for Research in Evidence-Based Practice, Faculty of Health Sciences and Medicine, Bond University, Gold Coast, Queensland 4229, Australia
  2. 2Australian Commission on Safety and Quality in Health Care, Sydney, Australia
  3. 3University of New South Wales, Sydney
  4. 4University of Melbourne, Victoria, Australia
  5. 5University of Queensland, Brisbane, Australia
  6. 6Institute of Health and Biomedical Innovation, Queensland University of Technology, Australia
  1. Correspondence to: P P Glasziou Paul_Glasziou{at}bond.edu.au
  • Accepted 1 July 2012

Financial incentives can sometimes improve the quality of clinical practice, but they may also be an expensive distraction. Paul Glasziou and colleagues have devised a checklist to help prevent their premature or inappropriate implementation

Financial incentives (pay for performance) for clinicians are an intuitively reasonable solution to the well documented gaps between evidence based best practice and routine care.1 They were fundamental to the 2004 Quality and Outcomes Framework (QOF), which paid primary care physicians in England up to 25% of their income for achieving 147 performance indicators, including 76 clinical targets (such as recording smoking behaviour, keeping blood pressure and cholesterol levels below targets, and spirometry in patients with asthma).2 Whether the cost (around an extra £1bn (€1.3bn; $1.6bn) annually) was justified has been contested.3 Similar attempts include over 170 initiatives in public and private US hospitals,4 and Australia’s Medicare Practice Incentives Program, which targets quality in primary care.5

To aid those making the difficult and costly decision of whether and how to use a financial incentive, we reviewed the evidence on the positive and negative effects of financial incentives and developed a simple checklist.

Synopsis of the evidence

Current evidence on the effectiveness of financial incentives is modest and inconsistent. Outside healthcare, early research suggested that financial incentives improved employee motivation and performance, but a meta-analysis found this was not always true for complex systems, where careful design and integration within the organisation was needed.6 An overview of four systematic reviews in healthcare found none had examined the effect on patient outcomes.7 Financial incentives had mixed effect on consultation or visit rates (improving 10 of 17 outcomes from three studies) and generally improved processes of care (41 of 57 outcomes from 19 studies) and referrals and admissions (11 of 16 outcomes from 11 studies) …

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