Analysis of Performance Based Additional Payment System in Hospital

Abstract

Businesses are struggling to sustain their activities and increasing their profitability in an atmosphere of intense rivalry. The aim of pay for performance (P4P) program in healthcare is to improve the utilization of healthcare services by charging for results to doctors and hospitals. Since 2004 the Turkish Ministry of Health has introduced P4P. The aim of this research is to explore the complex impacts of P4P on patient and physician behaviors. The model involves relationships between doctors and customers, income constraints on doctors and the related impacts on health production and efficiency. Physicians are being forced to undertake further therapeutic procedures in order to improve profitability. A physician who is facing revenue pressure may want to improve his / her profits by doing more medical practices and give less priority to quality. The subsequent insufficient therapies and misdiagnosed patients will have negative effects on quality of health. On the other side, doctors with no income considerations can offer utter priority to the standard of healthcare, thereby undermining productivity. This propensity will contribute to crowding in hospitals and high crowding burdens on physicians.