What is pay for performance?


By:Diana González-Bravo
MD, Epidemiólogo
Investigador MBE

Pay for performance is an incentive payment scheme for health providers according to compliance with proposed health goals and the quality of services provided. Neuroeconomix offers a summary of the pay for performance scheme and its possible application in the Colombian health system.


What is a payment scheme for health performance?


There is no universally accepted definition for the pay-for-performance scheme. Pay for performance, or P4P is a broad concept that includes both the quality and efficiency with which health services are provided. Conceptually, P4P is a monetary incentive, offered to doctors, hospitals, EPS, IPS, medical groups and any other health service provider, whose purpose is to motivate the achievement of certain associated performance measures, both coverage and quality of medical services to clinical goals, for example the control of overweight and reduction of smoking.



How is the performance of the health system measured?

Recently, Colombia became part of the Organization for Economic Cooperation and Development (OECD) members. Given this situation, a performance measurement scheme must be aligned with the standards of this organization. These standards establish that this scheme should define the set of data, indicators and analysis of the performance and results of health policies; this in order to guarantee practices that improve the economic and social welfare of the populations and favor the exchange of analysis and comparative evidence to predict trends among member countries, as well as to set international standards in the performance of health systems that seek welfare of the population.


Modalities to implement a pay for performance system:

  1. Condition the level of the UPC received by the EPS through a payment mechanism based on an ex ante component (before the service), as is currently the case, but also accompanied by an ex post component (after it is received the service), based on indicators of performance and quality of the service provision of the previous year (Bardey, 2015).


  1. Determine the administration expenses or the excess that the EPS receive, which would allow subjecting them to complementary incentives associated with their two functions of clinical risk management and financial risk (Bardey, 2015).


  1. Compensate or penalize EPS for compliance or non-compliance with their goals (combination of the two previous ones). One modality could be to reward EPSs that have met their goals, via an increase in the value of their UPC that would be paid in recognition of the good quality they have offered, and a penalty in the event that health goals that are not met (Bardey, 2015).


Varieties of payment for performance


P4P can mean a series of different concepts, both in theory and in practice. The main variation is found in the definition of performance, which varies according to the aspects of care or results that are rewarded. The main definitions of P4P include the following:


  1. Payment for quality, measured in different ways, such as processes, clinical outcomes, composite measures that combine qualitative and quantitative indicators
  2. Payment per report, related to the quality of the information reported.
  3. Payment for efficiency, basically means rewarding the fulfillment of the goals with the lowest cost
  4. Payment for value, which combines the quality and measure of the costs for efficiency


The experience of P4P in Colombia

In Colombia, EPS have incentives to control expenses, which affects the quality of the services offered to users. From the perspective of the EPS, it is considered that the increase in quality can increase health expenditures and, therefore, reduce the profit margin per affiliate. Due to this, a solution has been proposed within the current health system, as is the pay for performance scheme, which balances the incentives to which EPSs are subject, so that their economic results depend much more on quality offered to its users and less to control spending.

One of the problems associated with the pay for performance scheme is the quality the information and the report. In Colombia, in 2014, a pilot scheme was initiated to feed the databases that collected pay for performance information at the national level, around the management of patients with chronic kidney disease, including EPS of both regimens.

There has been no extensive use of the payment for performance scheme in Colombia and it is not yet fully in force. It has usually been used by insurers of the contributory regime at ambulatory level, and mainly in health promotion and prevention programs (PYP) (Gorbanev et al, 2011).

This scheme, appropriately applied and adapted to the Colombian context, can be a valuable means to promote a better quality in the current health system. Specifically, quality indicators must be chosen very well to meet the criteria measured in performance and improve the quality and access of health services offered.


OECD (2015), OECD Reviews of Health Systems: Colombia 2016, OECD Publishing, Paris. Fecha de acceso 23/07/2018. Disponible en:

Cashin, Cheryl and Chi, Y-Ling and Smith, Peter and Borowitz, Michael and Thomson, Sarah (eds.) (2014) Paying for performance in healthcare: implications for health system performance and accountability. European Observatory on Health Systems and Policies Series. Open University Press, Buckingham, UK. . Fecha de acceso 23/07/2018. Disponible en:

Cromwell, J., Trisolini, M. G., Pope, G. C., Mitchell, J. B., and Greenwald, L. M., Eds. (2011). Pay for Performance in Health Care: Methods and Approaches. RTI Press publication No. BK-0002-1103. Research Triangle Park, NC: RTI Press. Fecha de acceso 23/07/2018. Disponible en:

Ministerio de Salud y Protección Social. Sistema de Evaluación del Desempeño del Sistema de Salud de Colombia bajo Criterios de la Organización para la Cooperación y el Desarrollo Económico (OCDE) – Colombia. Guía metodológica. Serie: Registros, Observatorios, Sistemas de Seguimiento y Salas Situacionales Nacionales en Salud 2016. ISBN: 978-958-8903-43-9.  Fecha de acceso 23/07/2018. Disponible en:

Gorbanev L, Cortes A, Torres S, Yepes F. Pago por desempeño en el sistema colombiano de salud. Revista de Salud Pública; Vol. 13, Núm. 5 (2011). Fecha de acceso 23/07/2018. Disponible en:

Bardey D. Pagos por desempeño en el sistema de salud colombiano. Monitor estratégico, MINSALUD. Biblioteca digital, Núm. 7 (Enero-Junio 2015). Fecha de acceso 23/07/2018. Disponible en:



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