Impact of Pay-for-Performance on Efficiency and Effectiveness in Hospitals: A Systematic Review

  • Neda Kabiri Department of Health Services Management, School of Management and Medical Informatics, Tabriz University of Medical Sciences
  • Ali Janati Department of Health Services Management, School of Management and Medical Informatics, Tabriz University of Medical Sciences
  • Masoumeh Gholizadeh Department of Health Services Management, School of Management and Medical Informatics, Tehran University of Medical Sciences
  • Faramarz Pourasghar Department of Health Services Management, School of Management and Medical Informatics, Tabriz University of Medical Sciences
Keywords: systematic review, Pay-for-performance, efficiency, effectiveness.


Purpose: Pay-for-performance (P4P) refers to the transfer of money on taking a measurable action or achieving a predetermined performance target. In this systematic review, we will present the results of P4P impacts based on published articles.

Methods: A systematic review of literature was done using following databases and search engines: PubMed, Webofknowledge, Sciencedirect, The Cochrane library, MagIran and SID. Keywords used were, Pay-for-performance, P4P, output based payment, result based payment, financial incentives, value based purchasing, effectiveness, efficiency, cost, quality, patient satisfaction, provider satisfaction, mortality, length of stay, clinical outcomes, charges, access, hospitalization, equity, patient outcome, outcome of care. No limitations were considered for time of publishing studies, and searching articles was continued until February 2013. Only impact of P4P on physicians and nurses in hospitals were considered. The literature search yielded 7172 records, of which 34 met our inclusion criteria.

Results: Thirty-four studies were included in this systematic review taking part in different countries and settings with different type of studies. P4P effects can be judged to be encouraging or disappointing, depending on the design choices and characteristics of the context in which it was introduced.

Conclusion: The impact of P4P targeting physicians and nurses seems to be positive on most of the effectiveness and efficiency indicators. However, implementation of P4P should be accompanied by robust evaluation plans.



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