The idea of giving financial rewards to health care providers in order to improve quality of care for patients is increasingly being adopted internationally. However, little evaluation has taken place in order to determine whether these programs have any actual effect.

Only three hospital pay-for-performance programs have been evaluated, and good evidence was available for only one — the Hospital Quality Incentive Demonstration (HQID) adopted by the Centers for Medicare and Medicaid Services in 2003. Results were, at best, modest, and there was no improvement in mortality seen in the HQID program.

However, in 2008, a program called Advancing Quality, very similar to the HQID program, was introduced in all 24 National Health Service hospitals in northwestern England. The program financially rewarded only the top performing hospitals, and a total of $5 million in bonuses was paid to hospitals at the end of the first year.

Continue Reading

Researchers examined the results of this program in order to determine whether paying for performance could reduce mortality rates in hospitals. The results of this study were published in the New England Journal of Medicine. Data was collected from the hospitals for 18 months prior to the start of the program and 18 months after it’s initiation.

Researchers focused on deaths that occurred within 30 days of admission for three specific conditions: pneumonia, acute myocardial infarction and heart failure. Mortality was compared among 134,435 patients in the Advancing Quality program, compared with 722,139 patients admitted for the same three conditions to the 132 other hospitals in England.

According to the researchers, risk-adjusted absolute mortality for the three conditions in the Advancing Quality group decreased significantly, with a reduction of 1.3 percentage points, and a relative reduction of 6%, equivalent to 890 fewer deaths during the 18-month period after the program onset. The most significant reduction in mortality was for patients with pneumonia.

The study authors were unsure about why the reductions in England were significant, while reductions in a similar program in the U.S. were not, but they speculated that this might be due to the fact that the U.K. program had larger bonuses and a greater investment by hospitals in quality improvement activities. The researchers concluded that, “details of the implementation of incentive programs and the context in which they are introduced may have an important bearing on their outcome.”

Ann W. Latner, JD, a former criminal defense attorney, is a freelance medical writer in Port Washington, N.Y.


  1. Sutton M et al. N Engl J Med. 2012; 367:1821-1828