Skip to main content

Bonus Pay for Doctors Can Boost Quality of Care

Analysis  |  By Christopher Cheney  
   February 08, 2019

Large physician bonuses in pay-for-performance reimbursement arrangements are associated with improvement in evidence-based care.

Pay-for-performance arrangements for physicians that feature large bonus payments can have a positive impact on clinical quality, research published today suggests.

As the healthcare sector shifts from volume-based payment models to value-based models, pay-for-performance reimbursement for physicians has become increasingly widespread. The most ambitious pay-for-performance program in the country is the Merit Incentive Payment System enacted under the Medicare Access and CHIP Reauthorization Act of 2015.

Big bonuses are hard for physicians to ignore, the lead author of the research published today in Journal of the American Medical Association told HealthLeaders.

"Increasing bonus sizes brings more attention from clinicians to quality metrics on which they are being measured. More attention may lead to better follow through and achievement of specific quality metrics, especially those that are process oriented. In some cases, the dollars may get invested in infrastructure, processes, or information technology that helps deliver better quality care," said Amol Navathe, MD, PhD, Department of Medical Ethics and Health Policy, Perelman School of Medicine, University of Pennsylvania, Philadelphia.

When Navathe and his research team added two behavioral economic factors to their study—increased social pressure and loss aversion—there were no gains in pay-for-performance effectiveness, he said.

"It should be noted however that increasing bonuses has not uniformly led to higher quality of care, which is one reason we tried to bring in behavioral economics to get more 'bang for the buck.' In our study, the behavioral economic designs did not seem to add to the return on investment."

Patients should be the primary concern when structuring bonus payments, Navathe said.

"There are several considerations, but chief among them is aligning the bonuses with what is best for patients. Components of P4P programs like quality metrics and the data underlying them are imperfect, so employers and payers should be mindful that the entire program design should emphasize activities that are good for patients—without putting physicians and patients at odds with good care. This may mean emphasizing areas where we feel more confident about the quality metric, the data underlying it, and the lack of unintended effects."

Gauging impact of bonuses

Navathe's research team examined the proportion of 20 evidence-based quality measures achieved. There were 33 physicians and more than 3,700 patients included in the study's analysis.

Larger bonus size was linked to a greater increase in evidence-based care than a control group. Three individual measures of evidence-based care showed improvement under large bonus size arrangements: blood pressure control, conducting a foot examination with a diabetes diagnosis, and tobacco cessation.

In the study, the mean size of annual bonuses given to physicians was $3,355.

"We found an increase in bonus size was associated with significantly improved quality for patients receiving care for chronic disease relative to a comparison group during a single year," Navathe and his team wrote.

Christopher Cheney is the senior clinical care​ editor at HealthLeaders.


Physician pay-for-performance arrangements are among the leading value-based payment models in healthcare.

Increased bonus sizes encourage physicians to focus on the quality metrics on which they are measured.

Increasing bonuses does not universally lead to higher quality performance.

Get the latest on healthcare leadership in your inbox.