Measuring the effect of pay-for-performance financial incentives on hospital efficiency in the military health system

Nathaniel D. Bastian, Hyojung Kang, Paul M. Griffin, Lawrence V. Fulton

Research output: Contribution to journalArticlepeer-review

7 Scopus citations

Abstract

The U.S. military health system implemented a pay-for-performance financial incentive program in 2007 in an effort to stimulate patient quality, access, and satisfaction improvements. This study measures the effect of the monetary incentive model on hospital efficiency and outcomes. Using a retrospective, quasi-experimental design, the empirical analysis incorporates data envelopment analysis with time windows and difference-in-differences estimation. Hospitals are evaluated in the U.S. Army, Air Force, and Navy during the period of 2001–2012. The results indicate a statistically significant reduction in technical efficiency for the hospitals that received pay-for-performance financial incentives. The healthcare policy implications of this study are applicable in light of the national healthcare debate and may assist healthcare policy makers in determining the efficacy and associated trade-offs of pay-for-performance financing models.

Original languageEnglish (US)
Pages (from-to)33-41
Number of pages9
JournalIIE Transactions on Healthcare Systems Engineering
Volume6
Issue number1
DOIs
StatePublished - Jan 2 2016

All Science Journal Classification (ASJC) codes

  • Safety, Risk, Reliability and Quality
  • Safety Research
  • Public Health, Environmental and Occupational Health

Fingerprint Dive into the research topics of 'Measuring the effect of pay-for-performance financial incentives on hospital efficiency in the military health system'. Together they form a unique fingerprint.

Cite this