Pay for Performance

We’re all hearing a lot right now about “pay for performance”—programs that offer physicians and other health care providers financial rewards for meeting certain quality or cost-effectiveness standards. Private insurers started introducing pay-for-performance (P4P) programs in the 1990s. These days, “P4P” is making headlines because efforts to introduce it into Medicare are rapidly gaining ground.

An array of policymakers and stakeholders, including The Centers for Medicare & Medicaid Services (CMS), Congress, nongovernmental organizations, and medical societies are...