Policymakers aim at improving quality of care and the efficiency of health systems. One increasingly popular policy lever is the use of Pay for Performance schemes that incentivise the adoption of best practice by financially rewarding process and outcome measures of quality in primary and secondary care. Despite their popularity, the evidence about their effectiveness remains inconclusive. This study analyses the effects of a national Pay for Performance scheme in the English NHS that incentivises hospitals to achieve best practice in the delivery of hip fracture care. The Best Practice Tariff for hip fracture, introduced in England in 2010, rewards providers based on a care bundling that consists of nine process measures that need to be jointly achieved. The nine measures include time to surgery within 36 hours, four measures of involvement of orthogeriatricians, the use of a multidisciplinary rehabilitation team, and provision of preventive activities (bone health assessment, falls prevention). In addition to the scheme being evidence-based, the size of the bonus was significant, up to 20% of the baseline tariff. After developing a theoretical framework to model P4P for care bundling, we use patient level data between 2008-2014 on a sample of 275,898 patients with a rich set of covariates, we employ difference-in-difference methods, with Wales as a control group, to identify the causal effect of this policy. The results suggest that the policy was successful in increasing the proportion of patients for whom all of the criteria are met by 52 percentage points. However, we find large heterogeneity across different performance measures. The largest improvement is in the measures requiring involvement of geriatricians in the care of patients (between 20 and 65 percentage points). The effect is much smaller in areas in which the achievement was already high in both countries before the introduction of the policy, such as falls prevention and cognitive assessment. Overall, we find that a scheme based on care bundling, which is evidence based, and uses a sizable bonus can be effective in improving hospital performance.
Speaker Luigi Siciliani, University of York short bio