Introduction

In March 2007, there were approximately 148 pay-for-performance programmes in the United States (The Leapfrog Group and Med- Vantage ® 2007). This marked increase (from thirty-nine in 2003) reflects the growing concern to seek increased value from the expenditures of health plans and organized health-care purchasers (predominantly government, private employers, unions, consumer groups, multiple-employer trusts). The General Medical Services Contract introduced in 2004 radically transformed the NHS in England, introducing 146 quality indicators to measure primary care team performance and encompassing 10 chronic conditions, care organization and patient experience. This new set of quality performance incentives offered general practice partnerships the potential to increase their annual income by as much as 25% (Roland 2004). Similarly, policy-makers in continental Europe are moving toward strategic purchasing which optimizes population health through service mix, contract design, payment systems and choice of health care (Figueras et al. 2005).

When designing appropriate performance incentives, decision-makers must incorporate the varying socio-demographic, political, economic, cultural and organizational conditions that prevail in local, regional and national environments. The incentive options available in different polities and markets largely mirror the nature of funding and health-care delivery in those areas. Particulars of policy and practice are not only influenced substantially by specific circumstances but also (at any point in time) are somewhat ‘path-dependent’ – shaped by history (Figueras et al. 2005). Initial conditions are important.

This book examines multiple dimensions of health system performance: population health; financial protection; individual health outcomes; clinical quality and appropriateness; responsiveness; equity; and health system productivity. Incentives are one type of policy instrument for improving performance and inevitably confront trade-offs among these objectives.