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Another way in which a group presence can affect performance is social loafing—the exertion of less effort by a person working together with a group. Social loafing occurs when our individual performance cannot be evaluated separately from the group. Thus, group performance declines on easy tasks (Karau & Williams, 1993). Essentially individual group members loaf and let other group members pick up the slack. Because each individual’s efforts cannot be evaluated, individuals become less...
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Setting pay for performance targets: do poor performers give up?

Bryan Dowd1, Roger Feldman, William Nersesian

  • 1Division of Health Policy and Management, School of Public Health, University of Minnesota, USA. dowdx001@umn.edu

Health Economics
|February 4, 2012
PubMed
Summary
This summary is machine-generated.

Pay for performance incentives significantly impact generic prescription rates (GPR). Setting targets optimally can improve GPR by 7.5 percentage points, but excessively high targets may cause practices to disengage.

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Area of Science:

  • Health Economics
  • Pharmaceutical Policy
  • Clinical Practice Management

Background:

  • Health plans utilize pay for performance (P4P) incentives to influence physician behavior.
  • Generic prescription rates (GPR) are a key metric for cost containment and quality in outpatient drug prescribing.
  • Physician networks face challenges in optimizing P4P designs to maximize desired outcomes.

Purpose of the Study:

  • To evaluate the impact of P4P incentives on the generic prescription rate (GPR) within a physician network.
  • To determine the optimal P4P target for GPR to maximize generic drug utilization.
  • To analyze the 'give up' effect where practices may cease improvement if targets are perceived as unattainable.

Main Methods:

  • Utilized a partial adjustment model to estimate the effect of P4P on GPR.
  • Analyzed data from an established physician network with practice-level P4P rewards.
  • Simulated GPR outcomes under different target scenarios.

Main Results:

  • Estimated average equilibrium GPR without P4P was 58.3%.
  • Optimal GPR target estimated at 77%, potentially increasing average GPR by 7.5 percentage points (to 65.8%).
  • Targets exceeding 80% risk causing underperforming practices to disengage ('give up').

Conclusions:

  • P4P incentives can effectively increase GPR when appropriately designed.
  • A GPR target of 77% appears optimal for maximizing generic prescribing.
  • Careful consideration of target stringency is crucial to avoid unintended negative consequences on practice performance.