Incentives and Risks in Healthcare Delivery: Improving Patient Care

This essay provides a comprehensive analysis of incentives and risks in healthcare delivery, focusing on the evolution and impact of performance incentives such as Pay-for-Performance (P4P) in improving healthcare quality and efficiency. It examines how these incentives, including financial and non-financial rewards, affect healthcare provider behavior and patient outcomes, referencing studies that both support and question their effectiveness. The essay also discusses the role of the Affordable Care Act in promoting integrated healthcare delivery through incentives and payment models like accountable care organizations and patient-centered medical homes. It addresses the challenges of ensuring equity and accessibility in healthcare, considering factors like patient demographics and provider biases, while exploring strategies to integrate primary and behavioral healthcare for a more holistic approach to patient care.

Running head: HEALTHCARE
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Title: Incentives and Risks in Health Care Delivery

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Some states such as the United States are working hard to repair their broken health
care system, implementing and correcting their means of primary care delivery and patient
centered care. (Rittenhouse and Shortell, 2009). New initiatives are being laid down on how
to expand primary care models, including the Obama Care Health Plan (Goodson, 2010). It is
clear that to change the health care delivery mechanisms in the US require changes and
policies that can fully support payment and reimbursement models (DeVoe and Stenger,
2013). Over the years different health provider performance incentives have been designed.
They were first adopted in the developed nations and now they are taking roots in the
developing nations with the aim of improving access to health care services.
According to the Elovainio (2010), these schemes have a unifying rationale but also
vary in their logic and implementation theories. Performance incentives are used at different
contexts to solve different issues bringing about more variations. Performance incentives
occupy a core part in health care architecture with a couple of different methods of incentives
being applied in health sectors. Incentive measures are managed care, capitation, and also
fund holding. The measures have a correlation with the choices in comprehensive policy used
to structure the incentive element in health care. Pay-for-Performance (P4P), the most
popular provider performance incentive program started in the 1980s but it was until this
century when exponential growth has been recorded in these schemes. A report called The
Crossing the Quality Cham published in 2001 which explained the challenges faced by the
health system in the United States is thought to have catalyzed the P4P initiatives. The report
stipulated that the scheme was faced by timeliness, patient safety, patient centeredness
efficiency, effectiveness and equity (Elovainio, 2010). This report gave a recommendation to
the policy makers and any other stakeholders that financial incentives and the processes of
health care delivery and implementation must focus on best practices and achieving quality
outcomes for the patient. High quality health service could be attained by rewarding and

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motivating health care providers for their excellent involvement in achieving equity,
timeliness, patient centeredness, efficiency, effectiveness and high levels of safety.
The main reason behind introduction of the Pay for Performance model was to
improve quality and efficiency of health care services and also cut excessive costs. This
scheme links the buyer to providers with incentives and operational quality outcomes
(Abduljawad and Al-Assaf, 2011). The assumption behind the P4P is that it would improve
and motivate providers in achieving their targets in quality health care and eradicate medical
errors. More than 25 percent of American companies, in 2005, paid their employees using the
P4P method. Payment systems are renown for paying health care professionals and services
for the quantity rather than the quality of service. Nevertheless, the health care practitioners
recorded an increase in their incomes through the quality services they offered. The UK helth
care established the P4P scheme almost two decades ago, whereby more than 8 000 health
care professionals and family physicians agreed to adhere to the 146 quality indicators
designed by the National Health Service. This would cost them a $ 40 000 income increase.
This shows that incentives incorporated with other means of improving performance could
change the quality of health care services. Incentive programme improves the morale of
health professionals and thus increasing the productivity. When the health professionals are
motivated and happy, they would deliver a quality service (Beith, Eicher and Weil, 2011).
Incentives could either be monetary or non-monetary, both of which affects behaviour and
productivity differently.
According to Doran, Maurer and Ryan (2017), financial incentives only improves the
target process of health care. They claim that there is no evidence showing that financial
incentives improves the patient outcomes. Eijkenarr, Emmert, Scheppach and Schoffiki
(2013) gave a similar conclusion concerning the Pay for Performance scheme but claimed
that the advantages of incentives could not be separated from other existing improvement

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initiatives. Qualitative and observational studies by Houle, McAlister, Jackevicius, Chuck
and Tsuyuki (2012) claim that quality achievements dues to incentive schemes are temporary.
The pay-to-performance initiative aims at reducing the variations in health care. This
scheme could eradicate nurse bias and uphold equity in health care delivery if its focus is
application of evidence to all patients. However, the financial incentives may make the
disparity worse as some groups tend to benefit inappropriately from these new schemes
(Flodgren et al., 2013). The health providers face challenges in administering quality health
care depending on the age, ethnicity, social status, motivation and frailty of the patient
(Gillam, Sinwardena and Steel, 2012)
According to Korda and Eldridge (2011), the Patient Protection and Affordable Care
Act brought a significant turnaround in financing, organization and delivery of health
services. This Act introduced incentive to providers and patients through an affordable and
accessible quality health care to the citizens. Methods of payment and incentives are
important instruments to promote and enhance integrated health care under this Act.
Application of models such as “accountable care organization and patient centered medical
homes” are essential in delivery of coordinated health care (Korda and Eldridge, 2011).
These models incorporated with other technologies are used to access and assure quality
health care services. Application of these models help in delivery of primary care which to
some extend involves payment and financial incentives, which are crucial in addressing
health care growth. This Act, enacted in 2010, promotes research and projects towards
delivery of quality health care. As the Affordable Care Act bring in integrated health care
delivery to improve health care quality, the big question remains: how can financial
incentives and payment increase accessibility, affordability and improve health care services.
Different approaches have been summoned to settle this question. These include,
incorporating payments and incentives that support care integration, integrating primary care

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and behavioral health care, adopting patient centred medical homes and accountable care
organizations. Integrating behavioral health care and primary care could be done through
collaborations and organizations with other health care providers. The Affordable Care Act
motivates payment incentives to spearhead integrated health care delivery. These incentives
are to be used as stepping grounds to enhance and advance the vision of delivering health
care services by motivating health care professionals to work in unison to be responsible for
cost and quality health care.

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References
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Beith, A., Eicher, R., and Weil, D. (2011). Do Performance-Based Incentives Improve TB
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healthcare delivery in the United States. OA family medicine, 1(1), 7.
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Gillam, S., Siriwardena, A. and Steel, N. (2012). Pay-for-performance in the United
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