Using Performance Thresholds to Affect GP Behaviour: Evidence from Scotland

Whether and how a change in performance-related payment motivated change in GP behaviour in Scotland is investigated in a recent article by OHE’s Yan Feng and colleagues, Ada Ma (Hong Kong government), Shelley Farrar (University of Aberdeen) and Matt Sutton (University of Manchester).

Whether and how a change in performance-related payment motivated change in GP behaviour in Scotland is investigated in a recent article[1] by OHE’s Yan Feng and colleagues, Ada Ma (Hong Kong government), Shelley Farrar (University of Aberdeen) and Matt Sutton (University of Manchester).

Under the NHS, general practitioners (GPs) are paid based on a mix of factors, including a pay-for-performance element, the Quality and Outcomes Framework (QOF), which was introduced in 2004. QOF rewards GPs according to performance on specific indicators. Although participation in the QOF is voluntary, it represents an important source of potential income for GPs and nearly all participate.

Previous literature has suggested that the observed improvements in quality of care for chronic disease patients in the QOF scheme were modest. Some research also has found associations between improvements in quality of care as the result of QOF incentives, as well as modest improvement in health outcomes, fewer emergency hospital admissions, lower health care expenditure, and reduced population mortality.

In this article, OHE’s Yan Feng and her colleagues investigate whether and how an April 2006 increase in the performance thresholds required for maximum payment under the QOF changed the behaviour of GPs in Scotland. A difference-in-differences estimator with fixed effects was employed to compare treatment for diseases with revised payment schedules to those without change. The results suggest that the increase in maximum payment thresholds in QOF improved GP performance on clinical indicators by 1.77% on average; low-performing GPs improved significantly more than their high-performing counterparts. The paper concludes that maximum performance thresholds are differentially effective in providing incentives for GPs and hold the potential for improving GP performance across all indicators.

[1]Feng, Y., Ma, A., Farrar, S. & Sutton, M., 2014. The tougher the better: An economic analysis of increased payment thresholds on the performance of general practice. Health Economics, Early view, doi: 10.1002/hec.3022.

For additional information, please contact Yan Feng.