Assessing Taiwan's pay-for-performance program for diabetes care: a cost-benefit net value approach

Pay-for-Performance (P4P) to better manage chronic conditions has yielded mixed results. A better understanding of the cost and benefit of P4P is needed to improve program assessment. To this end, we assessed the effect of a P4P program using a quasi-experimental intervention and control design. Two different intervention groups were used, one consisting of newly enrolled P4P patients, and another using P4P patients who have been enrolled since the beginning of the study. Patient-level data on clinical indicators, utilization and expenditures, linked with national death registry, were collected for diabetic patients at a large regional hospital in Taiwan between 2007 and 2013. Net value, defined as the value of life years gained minus the cost of care, is calculated and compared for the intervention group of P4P patients with propensity score-matched non-P4P samples. We found that Taiwan's implementation of the P4P program for diabetic care yielded positive net values, ranging from $40,084 USD to $348,717 USD, with higher net values in the continuous enrollment model. Our results suggest that the health benefits from P4P enrollment may require a sufficient time frame to manifest, so a net value approach incorporating future predicted mortality risks may be especially important for studying chronic disease management. Future research on the mechanisms by which the Taiwan P4P program helped improve outcomes could help translate our findings to other clinical contexts.