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Does pay-for-performance design matter? Evidence from Brazil.

Letícia Xander Russo1, Timothy Powell-Jackson2, Josephine Borghi2

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Pay-for-performance schemes show mixed results. This study found that frequent, larger bonuses for primary health care teams in Brazil

Keywords:
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Area of Science:

  • Health Services Research
  • Public Health Policy
  • Health Economics

Background:

  • Pay-for-performance (P4P) schemes have inconsistent impacts on healthcare outcomes.
  • P4P interventions are often treated as uniform, despite significant variations in their design.
  • Understanding specific P4P design elements is crucial for effective implementation.

Purpose of the Study:

  • To analyze incentive design variations within Brazil's national P4P scheme (PMAQ).
  • To explore associations between different P4P design typologies and primary healthcare provider performance.
  • To inform the design of more effective P4P initiatives.

Main Methods:

  • Nation-wide survey of municipal health managers to characterize P4P scheme design.
  • Analysis of bonus size, incentivized providers, and payment frequency.
  • OLS regressions and cluster analysis to identify design typologies and their impact on Family Health Team (FHT) performance.

Main Results:

  • Frequent (monthly) bonus payments and larger bonus allocations (20-80% of funds) were linked to better FHT performance.
  • The specific recipients of bonuses within a team did not independently affect performance.
  • A cluster combining large bonuses, many incentivized workers, and high payment frequency showed significantly higher performance (21.7% increase).

Conclusions:

  • Specific P4P design features, particularly bonus frequency and size, significantly influence healthcare provider performance.
  • Combinations of design features, not isolated elements, are key to optimizing P4P effectiveness.
  • Findings provide evidence for designing more impactful P4P schemes in primary care.