1. Supported by: Pay for performance Anita Charlesworth, Chief Economist, Nuffield Trust

2. Supported by: Key Issues 3: Pay for performance Why pay for performance? 1. Signalling payment is one way to signal what is important and incentivise providers to focus on this? Others are targets, regulatory and professional standards and guidelines? Is payment more effective that the other options? Is payment more effective if it is combined with other levers? What is different about payment?

3. Supported by: Key Issues 3: Pay for performance 2. Quality and cost Better quality is more expensive Why not just increase reimbursement price to deliver desired quality? If performance varies substantially between providers – quality premium or threshold avoids economic rents. Better quality is cheaper Why not just reduce the reimbursement price? If improved quality reduces activity is this a form of gain sharing to incentivise providers to make improvements which would have a negative impact on their income? Concerned about the instability this might cause for providers and patients who may find it difficult to achieve quality standard.

4. Supported by: Key Issues 3: Pay for performance Key challenges Defining high quality The type of indicator: What domains of quality, with what weight Who sets the standard and on what basis – what to reward Availability of robust metrics which providers can’t game Value – how to achieve improvement rather than displacement Administrative cost and complexity

5. Supported by: Key topic 3: Pay for performance What is the role of pay for performance versus the provision of better information on quality for patients, physicians and purchasers? What are the strengths and weaknesses of pay for performance – is it different for physician reimbursement and hospital reimbursement? Which policies help to further a beneficial impact of pay for performance payments? What role, if any, should HTA bodies such as NICE have in pay for performance models? What innovations are next?

6. 24 January 2012 www.nuffieldtrust.org.uk Sign-up for our newsletter www.nuffieldtrust.org.uk/newsletter Follow us on Twitter (http://twitter.com/NuffieldTrust) © Nuffield Trust