Incentives in Healthcare

By Professor Martin Roland, Professor of Health Services Research, University of Cambridge

In 2004, the UK’s introduced one of the world’s largest pay for performance schemes, the Quality and Outcomes Framework (QOF) into general practic.1 Clinical care improved following the introduction of the QOF,though the effects were not compelling and were difficult to disentangle from other ongoing quality improvement initiatives (e.g. national guidelines, public release of information on quality of care). For major chronic conditions, it seemed that the incentives maintained or increased pre-existing trends in quality improvement but the effect plateaued as physicians gained the maximum rewards available. The scheme may have had a greater effect in areas that were previously low priorities for GPs – e.g. annual review of patients with learning disability.

Overall, the results are consistent with the quality improvement literature which suggests that there is no ‘magic bullet’ but that multiple interventions sustained over time can produce major improvements in care.3 Unintended consequences are high on the list of criticisms of P4P4 5 and the risks of perverse or unintended consequences are well known.Incentive schemes only reward what can be measured, and this can lead to less holistic care and inappropriate concentration of the doctor’s gaze on what can be measured rather that what is important.Throughout the ten years that QOF has been in operation, doctors have been ambivalent about it, welcoming some aspects where the framework reinforced commonly accepted medical standards but with concerns about others.8 9

A key message is the importance of aligning professional, managerial and financial incentives in order to reduce the risk of perverse or unintended consequences from incentive schemes.

View Professor Roland's video presentation may be viewed on the bottom right. Access his powerpoint presentation here.


1. Roland M. Linking physician pay to quality of care: a major experiment in the UK. New England Journal of Medicine 2004; 351: 1448-54

2. Campbell SM, Reeves D, Kontopantelis E, Sibbald B, Roland M. Effects of pay-for-performance on the quality of primary care in England. New England Journal of Medicine 2009; 361: 368-78

3. Grimshaw J, Shirran L, Thomas R, Mowatt G, Fraser C, Bero L et al. Changing provider behavior: an overview of systematic reviews of interventions.  Medical Care 2001; 39 (suppl 2): 2-45

4. Lester H, Hannon K, Campbell SM. Identifying unintended consequences of quality indicators: a qualitative study. BMJ Quality and Safety BMJ Quality and Safety 2011; 20: 1057-61

5. Campbell SM, Kontopantelis E, Hannon KL, Barber A, Burke M, Lester HE. Framework and indicator testing protocol for developing and piloting quality indicators for the UK Quality and Outcomes Framework. BMC Family Practice 2011;12:85. 

6. Smith P. On the unintended consequences of publishing performance data in the public sector. International Journal of Public Administration 1995; 18: 277-310

7. Lester HE, Hannon KL, Campbell SM. Identifying unintended consequences of quality indicators: a qualitative study. BMJ Quality and Safety 2011; 20: 1057-61.

8. Campbell S, McDonald R, Lester H. The experience of pay for performance in English family practice: a qualitative study. Annals of Family Medicine 2008; 6: 228-234

9. Lester H, Matharu T, Mohammed M, Lester D, Foskett-Tharby R. Implementation of pay for performance in primary care: a qualitative study eight years after introduction. British Journal of General Practice 2013; 63: e408

https://www.youtube.com/embed/PDlAO8YufjE