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The problem with pay-for-performance schemes
  1. Suhas Gondi1,
  2. Derek Soled1,
  3. Ashish Jha2,3
  1. 1 Harvard Medical School, Boston, Massachusetts, USA
  2. 2 Health Policy and Management, Harvard Medical School, Boston, Massachusetts, USA
  3. 3 Health Policy and Management, Harvard TH Chan School of Public Health, Boston, Massachusetts, USA
  1. Correspondence to Dr Ashish Jha, Health Policy and Management, Harvard Medical School, Boston, MA 02115, USA; ajha{at}


‘The Problem with…’ series covers controversial topics related to efforts to improve healthcare quality, including widely recommended but deceptively difficult strategies for improvement and pervasive problems that seem to resist solution.

  • pay for performance
  • social sciences
  • healthcare quality improvement

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In recent years, both policy-makers and payers have been looking to pay-for-performance (P4P) in which financial incentives are used to reward providers for the quality or costs of care they deliver. These P4P schemes have garnered substantial interest from public (including Medicare and several state Medicaid programmes) and commercial payers, partly because they are so intuitive: it makes sense to reward providers who do better or penalise ones that do worse. Indeed, some studies have shown that P4P schemes have achieved some success. For instance, Wasfy et al demonstrated that a new Medicare penalty for hospital readmissions related to congestive heart failure or pneumonia led to a reduction in 30-day readmission rates for these conditions.1 However, the majority of evidence to date suggests that P4P schemes, particularly those applied at the individual practitioner level, have had little to no impact on quality, cost or outcomes, and often even cause harm by penalising providers who care for the sickest patients.2–5

There are several explanations that experts have posited for why P4P schemes have largely failed. First, structural obstacles outside the control of individual providers, such as poorly designed workflows, miscommunication across fragmented and uncoordinated care teams, and patient non-adherence to treatment regimens, may hinder a physician’s ability to improve patient outcomes.2 Second, measuring clinical performance is difficult, especially given limited data and challenging methodological constraints.6 Further, many schemes are based on imperfect metrics that can result in providers ‘gaming’ the system, improving their perceived performance without actually making patients better off.7 For example, a Medicare programme that penalised hospitals for hospital-acquired infections led some hospitals to deliberately under-report their infection rates or misrepresent hospital-acquired infections as ‘present on admission’.8 Third, behavioural economists have proposed that performance bonuses fail because extrinsic incentives, such as financial rewards, ‘crowd out’ intrinsic motivation.9 Clinical care has its own inherent rewards, such as the satisfaction obtained from healing a patient, which motivate physicians. Monetary incentives may be undermining this intrinsic motivation and thus worsening clinical performance.

There is one additional explanation that has received very little attention and should be considered. The social theorist, Pierre Bourdieu, laid out the theories of habitus and capital, which likely have some bearing on why P4P programmes that target individual physicians have had such minimal impact. They also offer insights into how schemes might be better designed to prompt improvements in clinical care.

Bourdieu considered human behaviour to be a result of habitus, a system of dispositions shared by those of the same social group.10 Dispositions are the everyday life practices and ways of being, thinking and acting that are acquired subconsciously through socialisation and related experiences. In the same vein, every physician (new and old) shares a similar and structured repertoire of dispositions—as well as behaviours, tendencies and perceptions—that are framed by the habitus of the medical profession. While all physicians embody a common habitus, they each have varying amounts of ‘capital’ that define them among their peers and in the real world. Bourdieu identified four types of capital: economic (monetary wealth), social (networks that one can use for support), symbolic (forms of recognition and prestige associated with one’s position) and cultural (competence and educational qualifications).11 The habitus of the medical profession encourages physicians to maximise capital and convert each form of capital into others. For example, internists may strive to obtain their American College of Physicians fellowship and use that distinction (cultural capital) to obtain a higher paying position (economic capital), expand their clientele or professional networks (social capital), or yield greater influence in their practice or specialty (symbolic capital).

As currently structured, P4P schemes often create conflict with the habitus of the medical profession because they seek to increase individual motivation through greater economic capital but frequently upset the other forms of capital. According to Bourdieu’s framework, motivation is a social disposition in which individual players (physicians) strive to access and maximise all forms of capital.5 If we take this to be true, then most current P4P schemes suffer from three key deficiencies.

First, performance bonuses may diminish social capital. As P4P schemes often apply to individual physicians, they might be seen as unfair. Medicine is a team sport, requiring the participation of a range of physicians and other healthcare professionals. A knee replacement requires contributions from a surgeon, an anaesthesiologist, a physical therapist, nurses, technicians and others. If only the surgeon receives a bonus for a successful outcome, relationships between members of the entire care team might be fractured.12 Likewise, rewarding the cardiologist for a patient’s lowered blood pressure while neglecting the primary care physician’s years of dietary counselling may breed discontent. While these risks are mitigated when performance bonuses are applied at the practice or hospital level, these scenarios could be envisioned with a nationwide P4P scheme currently being rolled out: the Merit Incentive Payment System, which positively or negatively adjusts Medicare revenue for individual clinicians based on quality metrics.

Second, P4P schemes may endanger symbolic capital by jeopardising existing power structures and introducing new reputational costs. Medicine is a hierarchical profession where seniority is rewarded and certain clinicians are looked up to. While P4P schemes may act as a catalyst for senior clinicians to change their practices, older physicians may find it more challenging to integrate the new metrics into their clinical routines compared with their younger counterparts who are not yet entrenched in their habits. If the financial scheme rewards junior staff over senior staff, it creates a rupture with symbolic capital.13 Additionally, even though P4P schemes aim to incentivise better quality in healthcare, the public may view P4P bonuses as a new way for physicians to supplement their income in a similar vein to how corporate bonuses are perceived. This could discourage full physician engagement with these schemes, as well as compromise patient trust.

Finally, many physicians likely lack the cultural capital necessary to navigate the system of targets and rewards in the P4P scheme. Achieving many of the existing quality measures requires robust team work in the form of coordination with providers across the care continuum, and few physicians are trained in advanced team management. While physician leaders have recently called for medical students and residents to receive business school-like training in leading large diverse teams, most medical trainees do not receive this type of education.14 Therefore, they may lack the cultural capital needed to navigate the targets, especially ones that rely on other members of the team.

If payers and policy-makers wish to continue to use P4P to reward and improve quality, they need to revise these schemes to improve their alignment with the medical habitus by offering social, symbolic and cultural forms of capital and making it easier to convert between each. For example, rejecting individual physician incentives in favour of team-level and practice-level bonuses would protect social capital by preventing perceived unfairness among providers on the same team. A system in which high quality scores also come with some sort of a rating would offer coveted symbolic capital and further motivate clinicians to engage in these metrics. In addition, formally teaching medical students and residents about team management and how to be team leaders would boost physician cultural capital. Gaining such symbolic and cultural capital from high ratings and leadership training would garner greater respect from other physicians and patients (social capital) as well as more clientele (economic capital). While only symbolic and cultural capital are directly offered, social and economic capital are indirectly achieved.

Tying only economic capital to performance is antithetical to the medical habitus. At its core, the medical profession values collaboration, fairness and respect for those genuinely devoted to serving others. A scheme that incentivises change by offering avenues to raise all types of capital would be more successful and sustainable. Simplistic economic models of physicians as rational economic agents have failed to get us where we want to go. Using methods from social science, we can begin to integrate social theory that will produce a better understanding of the interpersonal dynamics and motivations that shape the behaviours of clinicians. Such an understanding will help guide future initiatives to improve quality in healthcare systems.

  • Pay-for-performance schemes offer financial incentives to physicians who meet certain quality metrics. To date, they have largely failed to improve quality.

  • These incentive-based programmes have been unsuccessful in part because they only offer economic rewards to physicians. According to the social theorist Pierre Bourdieu, individuals are motivated by access to social, symbolic and cultural capital as well.

  • Programmes that benefit teams of physicians instead of individuals (social capital), have a rating system that recognises high-performing physicians (symbolic capital), and/or offer training in teamwork and coordination (cultural capital) may be more effective than current P4P schemes that aim to improve the quality of individual practitioners.



  • SG and DS contributed equally.

  • Contributors DS and SG contributed equally to this paper. They are co-first authors who conceptualised the idea and drafted the initial manuscript. AJ helped conceptualise the idea as well as reviewed and revised the manuscript.

  • Competing interests None declared.

  • Patient consent Not required.

  • Provenance and peer review Not commissioned; externally peer reviewed.