Impact of a pay-for-performance program on low performing physicians

Studies have shown that the lowest performing physicians in pay-for-performance (P4P) programs improved the most; however, it is unclear whether this would occur without the P4P program or be sustained. The objective of this study is to investigate the impact of P4P in a Preferred Provider Organization (PPO) on low performing physicians over a 4-year period. We used administrative claims data from a PPO health plan in Hawaii, which implemented a P4P program, and a PPO plan in the South, which did not implement a P4P program. The difference-indifference model was used to compare the quality scores between the two physician groups in preventive measures, a heart failure measure, and an HbA1c testing measure. We found that P4P programs may be effective in incentivizing low performing physicians to improvement quality of care and sustain improvement, and the positive benefit of the P4P program may not be realized until the 3rd or 4th year of the program.