Pay for Performance and Public Reporting do not always improve quality

While the goals of pay for performance and public reporting programs is to improve quality, they do not all make a lasting impact, and can backfire, according to an article in the New York Times.

The article examined two recent studies; one examining the results of a public reporting program, the other, the impact of a pay for performance program.

In the first study, nursing homes across the nation were assessed, and rated for quality publicly.   The nursing homes that were ranked highest for quality did end up attracting more patients; however, many of the patients were sicker than average, and as a result, some high-ranking nursing homes began “downcoding,” or changing the way they documented patients’ medical conditions, to make them seem healthier and maintain their scores on subsequent performance reports.

The second study from Health Affairs, analyzed the results of pay for performance program to see if quality was impacted.  The results showed that after five years, the pay for performance hospitals had performance scores identical to those using fee for service.

(Sources: The Advisory Board Daily Briefing,, June 17, 2011, New York Times, June 16, 2011; Health Affairs,, June, 2011)