P4P Physician Compensation

P4P in Ontario

Ontario implemented a physician pay-for-performance (P4P) scheme in 2002.  This P4P framework was a jointly agreed upon by the  Ontario government and the Ontario Medical Association.  The Ontario P4P program is described in Hurley, DeCicca and Buckley (2013) in more detail below:

[Ontario’s P4P program] targets performance bonuses on effective preventive services whose rates of provision were below optimal levels. The P4P incentives include two components: a contact payment and a cumulative preventive care bonus payment. The contact payment pays a PCR practice $6.86 for each eligible patient in the target population that it contacts to schedule an appointment for one of the defined preventive care services. The cumulative preventive care bonus payment rewards a PCR practice for achieving high rates of service coverage in its practice population. The P4P payment for each service is made on March 31 of each year based on the proportion of a physician’s eligible, enrolled patients who received the targeted service during the eligible period of time. Payment in all models is based on the performance of individual physicians (i.e., not the group as a whole).

The question is, did it work? The authors use a difference-in-difference framework that takes advantage of the fact traditional fee-for-service physicians were not included in the P4P program, only physicians who worked in ‘primary care reform’ (PCR) practices were effected. They find the following:

Our estimates indicate that Ontario’s P4P incentives led to only a modest improvement in performance with respect to Pap smears, mammograms, senior flu shots, and colorectal cancer screenings, and no improvement with respect to toddler immunizations…Overall, our results are consistent with existing research, which in general has found that targeted P4P incentives generate mixed, mostly modest physician responses…our findings send a cautionary message regarding the effectiveness of employing P4P to increase the quality of physician care.


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