health care presents a unique set of challenges for practice improvement, innovations that are evidence based and have been demonstrated to improve the quality of care can take in excess of 17 years to become common practice (Balas and Boren, 2000). Delay in the development or implementation of best practices has substantial human and financial costs. Open dissemination of experience is necessary to harness the capacity of the health care industry to improve. Pay-for-performance programs could unintentionally subordinate collaboration to competition. Providers following a more economically directed model of care might hesitate to share successful practice improvement strategies with their competitors, fearing that doing so would put at risk not only the financial incentives offered through pay for performance, but also the competitive advantage that these successful innovations would offer in negotiating with patients and insurers.

It is difficult to know how best to prevent this from occurring. Clearly the business case for cooperation must be made as solidly and quickly as possible so that providers will be motivated to share both successful strategies and barriers to implementation they may identify. Government is limited in its ability to bring about this type of interchange. Entities such as Medicare’s Quality Improvement Organizations might provide a forum for exchange of such information, fostering the creation of a culture of quality improvement (IOM, 2006a).

A separate compelling concern is that pay for performance could inadvertently stifle long-term innovation by shifting the focus of quality improvement exclusively to the achievement of short-term goals. While it is important to reward interventions that result in short-term improvements, it is essential as well not to suppress the experimentation and innovation that can lead to new procedures, applications, and approaches that can generate long-term continuous improvement in quality. Successful pay-for-performance programs must not foster the development of a new status quo that is better, but incomplete.

Demoralized Workforce

Pay for performance must be structured to promote higher-quality care and cost control, but not at the expense of driving providers from the health care arena. Provider acceptance will be a large point of contention in any pay-for-performance initiative. If payment under such a program is perceived by providers as unfair, they may become increasingly demoralized. Additionally, if the burden on providers of participating in a Medicare pay-for-performance program is too overwhelming (relative to the potential rewards), providers may withdraw from participation in Medicare, causing serious access issues in some geographic regions in addition to those discussed above. For example, fewer physicians are choosing primary care as



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