Rasmussen Collage Strengths and Weaknesses of P4P Program Report

Since P4P has been around for a number of years, one would think that its effectiveness should be clearly documented. However, Peter Kongstvedt says that results have been mixed. He concludes that “positive results remain ambiguous, at least on a broad basis.”

Review various P4P program results and effectiveness on the Internet or through your college’s Online Library, which you can access in the Resources tab.

Write a 2-page report of your findings. Specifically, address strengths and weaknesses of this compensation method, both from the point of view of the health plan and the physician. Cite at least two sources. List sources in APA format.

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Pay-for-performance (P4P) is a compensation method that aims to enhance quality and efficiency of healthcare through incentivizing healthcare providers for meeting performance targets. In this report, I will review and analyze various P4P program results and their effectiveness. I will specifically address the strengths and weaknesses of this compensation method, as perceived by both the health plans and physicians.


P4P programs have been around for a significant period, but their effectiveness remains uncertain. Several studies document both positive and negative results of P4P programs, making it difficult to gauge the effectiveness of this compensation method. The strengths of P4P, as noted by healthcare providers, include increased focus on healthcare quality and improved patient outcomes.

However, P4P programs have several weaknesses, as pointed out by physicians and health plans. Physicians are skeptical of P4P because of the complexity of the performance metrics, which are often difficult to measure and dependent on multiple factors beyond their control. For instance, physicians may not have control over factors such as a patient’s genetics, financial constraints, or social determinants of health. As such, P4P programs often lead to the “fragmentation” of care, where providers prioritize metrics that attract incentives, potentially compromising overall patient care.

Health plans may also experience weakness in P4P; for instance, programs may lead to resentment and frustration among providers when these fail to meet targets. P4P targets may also not be realistic, and achieving them may require significant investments in technology, personnel, or operational expenses.

In conclusion, P4P programs are an effective method of incentivizing healthcare providers to attain set performance goals. However, more research and evaluation are required to gauge their effectiveness. While there are strengths of P4P, such as improved focus on healthcare quality, it is essential to consider apparent weaknesses, such as the fragmentation of care, skepticism among providers, and resentment from failing to meet targets. Healthcare stakeholders should collaborate to develop practical and feasible methods of implementing P4P programs, tailored towards performance metrics that can genuinely improve patient care.


Epstein, A. M., & Jha, A. K. (2018). Performance measurement in healthcare. BMJ, 360, K1336.

Mendelson A, Kondo K, Damberg C, et al. The effects of pay-for-performance programs on health, health care use, and processes of care: a systematic review. Rockville (MD): Agency for Healthcare Research and Quality; 2017. PubMed PMID: 29116968.

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