Analysis

Setting performance targets in pay for performance programmes: what can we learn from QOF?

BMJ 2014; 348 doi: https://doi.org/10.1136/bmj.g1595 (Published 04 March 2014) Cite this as: BMJ 2014;348:g1595
  1. Tim Doran, professor 1,
  2. Evangelos Kontopantelis, senior research fellow 2,
  3. David Reeves, reader 3,
  4. Matthew Sutton, professor 4,
  5. Andrew M Ryan, associate professor5
  1. 1Department of Health Sciences, University of York, York YO10 5DD, UK
  2. 2Centre for Health Informatics, Institute of Population Health, University of Manchester, Manchester, UK
  3. 3Centre for Biostatistics, Institute of Population Health, University of Manchester
  4. 4Centre for Health Economics, Institute of Population Health, University of Manchester
  5. 5Division of Outcomes and Effectiveness Research, Weill Cornell Medical College, New York, USA
  1. Correspondence to: T Doran tim.doran{at}york.ac.uk

The UK’s Quality and Outcomes Framework, which was introduced in 2004 to reward general practitioners for meeting performance targets, has been controversial. Tim Doran and colleagues reflect on the difficulties of setting and adjusting targets and the missed opportunities for improving the evidence base

For many policy makers, paying healthcare providers for performance is an intuitively appealing way of improving quality and value in services. However, the results from incentive programmes in healthcare have been inconsistent,1 2 3 4 and progress in designing them has been slow.5 6 Careful calibration of incentives is essential when determining performance indicators and setting targets. As well as being aligned with professional values, targets must be challenging but attainable, and payments must be large enough to promote high quality care without distorting clinical practice. The financial implications for both payers and providers can lead to contentious contractual disputes. We discuss how targets are set in pay for performance programmes and look at the experiences of a national incentive scheme for general practitioners in the UK.

How do payers set targets?

Most pay for performance schemes use either relative targets or absolute targets. The relative target approach compares performance between providers and is used in tournament style programmes, where higher performers are rewarded and low performers may even be penalised—for example, Medicare’s physician value based payment modifier.7 Payers must decide what proportion of providers to reward but don’t make judgments on acceptable levels of performance. This approach has several drawbacks for providers: as they do not know the targets in advance they lack a firm reference point to guide quality improvement efforts, and high levels of achievement may not be rewarded, which is particularly unfair when the distribution of performance scores is narrow and differences between providers are clinically insignificant.

With absolute targets, also known as criterion …

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