Professor Ruth McDonald ~ Paying for Performance in the NHS – is it good for our health?

In the olden days, we used to trust public servants to do their best for the people they served. Nowadays things are a little different, especially in the NHS. Policy makers are increasingly resorting to ‘Pay for Performance’ (PfP) in an effort to drive up the quality of care delivered to patients. The Commissioning for Quality and Innovation Payment Framework, or CQUIN as it is known, makes a proportion of income conditional on the achievement of quality improvement and innovation goals. This was increased from 0.5 to 1.5% in the second year of the scheme and this year the percentage was increased to 2.5%. David Nicholson, the NHS Chief Executive said recently that he wants to see this rise to 4 or 5%, presumably due to fears that the 2.5% isn’t having the desired effect.

The question asked by a lot of people is ‘do PfP schemes work’? But this is the wrong question, since it fails to recognise that these initiatives are all different. What we need to do is to look at the features of the individual schemes – how they are designed and implemented and in what context – and assess impact to work out how and to what extent a scheme works.

Our recent evaluation of the Advancing Quality (AQ) scheme in the NHS North West found that it saved almost 900 lives. The bonus payments were a drop in the ocean compared with CQUIN, which suggests that whilst it’s helpful to offer carrots, there are other motives afoot here. Perhaps NHS staff are only too ready, willing and able to improve services, but what they need sometimes is a little help. In this case, help took a number of forms including standardised data definitions and bespoke software. But aside from these technical aspects, collaborative events brought together staff from all 24 participating organisations to share their learning and work through common problems. In addition to shared learning, the development of this AQ ‘community’ appears to have been really important in providing emotional support for what has been (make no bones about it!) a gruelling and often uphill struggle for the staff involved. As our study shows, ‘PfP’ can produce desired results, yet  what motivated the front line NHS staff in our study was not ‘rational’ calculation of efforts versus rewards, but an ability and desire to  work together in a supported way, to do what they all felt was the right thing for patients. AQ has now broadened its scope to include all of the mental health Trusts in the region so we’re watching with interest to see if the initial success can be replicated as the programme expands.

Much of the thinking on incentives has traditionally been dominated by economists who take a rather one dimensional view of human beings. And economic rationality has often been seen as contrary to emotion. But an obsession with finding the magic percentage which proves to be a tipping point is the wrong way to go here (David Nicholson, please take note). What’s needed is for policy makers and evaluators to begin to adopt a less impoverished view of human behaviour – recognising the importance of emotion in improvement initiatives would be a good place to start.

Posted by:
Professor Ruth McDonald
Chair in Health Innovation and Learning
Business School
University of Nottingham


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