Uncertainty about the effort-performance relationship in threshold-based payment schemes

Publication date: Available online 15 September 2018Source: Journal of Health EconomicsAuthor(s): Anne Sophie Oxholm, Søren Rud Kristensen, Matt SuttonAbstractIncentive schemes often feature a threshold beyond which providers receive no additional payment for performance. We investigate whether providers’ uncertainty about the relationship between effort and measured performance leads to financially unrewarded performance in such schemes. Using data from the British Quality and Outcomes Framework, we proxy general practitioners’ uncertainty about the effort-performance relationship by their experience with the scheme and their span of control. We find evidence that providers respond to uncertainty by exerting financially unrewarded performance, suggesting that uncertainty may serve as a useful incentive tool to extract unrewarded performance for payers.
Source: Journal of Health Economics - Category: Health Management Source Type: research