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- Title
Who to pay for performance? The choice of organisational level for hospital performance incentives.
- Authors
Kristensen, Søren; Bech, Mickael; Lauridsen, Jørgen; Kristensen, Søren Rud; Lauridsen, Jørgen T
- Abstract
Financial incentives for quality improvement in hospital care [known as pay for performance (P4P)] can be directed to either the hospital level or redistributed to the department level. Theoretically, performance payments distributed to lower organisational levels are more effective in increasing performance than payments directed to the hospital level, but the empirical evidence for this expectation is scarce. This paper compares the performance of hospital departments at hospitals that do and do not redistribute performance payments to the department level. We study a Danish P4P scheme to provide patients with case managers. Applying difference in differences analysis, we estimate a 5 percentage points higher performance at hospital departments that are subject to a direct financial incentive. Our results suggest that payers can improve the effectiveness of P4P payments by distributing payments to the department level rather than the hospital level.
- Subjects
DENMARK; PAY for performance; LABOR incentives; HOSPITAL research; PRODUCTION functions (Economic theory); PRODUCTION (Economic theory); HOSPITALS; MEDICAL care cost control; MEDICAL quality control; QUALITY assurance; ECONOMICS
- Publication
European Journal of Health Economics, 2016, Vol 17, Issue 4, p435
- ISSN
1618-7598
- Publication type
journal article
- DOI
10.1007/s10198-015-0690-0