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Health targets, indicators and incentives: handle with care

Health performance targets can come with unintended consequences. AloneAlbatross

The Gillard Government’s health reform legislation passed through parliament without too much fanfare last year, marking the end to the political debates around health reform.

Importantly, the legislation gave the go-ahead for the establishment of a National Health Performance Authority (NHPA) to monitor, report on and evaluate the performance of Australia’s public hospitals and primary care providers.

But it remains unclear how the NHPA will work and whether the Performance and Accountability Framework, on which the authority will be based, will actually drive reform.

In making these decisions, it’s important the government does its homework and learns from similar systems that have been implemented elsewhere in the world – most notably, in the United Kingdom.

Setting standards

Defining specific standards that reflect what we think is best care (specifying what should happen, to whom, within what timeframe, and on whose watch) is one way of testing for quality. We can compare performance with these standards and see whether the system is operating as we would expect.

Adopting standards can itself stimulate improvements in the system. This was a strategy relentlessly pursued by the Blair government, not just in health but in many other sectors in the UK, including education and policing.

J D Mack

Health-care providers can be further encouraged to adopt standards by using one of the most powerful incentives: money. The UK’s Quality and Outcomes Framework (QOF) is one example of a pay-for-performance health structure but it remains unclear whether it has genuinely improved patient care.

Quality and Outcomes Framework

Since 2004, UK GPs have received economic incentives for providing high quality care. This is measured by more than 100 indicators covering all aspects of health care, including clinical care, organisation, patient experience and additional services.

These indicators range from the straightforward (percentage of “patients with hypertension in whom the last blood pressure is 150/90 mmHg or less”), to the complicated (new cancer diagnoses, child protection cases and admissions under the Mental Health Act).

The Framework was agreed on after extensive negotiations between bureaucrats and clinicians and although voluntary, the vast majority of GP joined this scheme. One-quarter of most GPs’ income, therefore, is linked to quality indicators.

Since the introduction of the scheme, primary care clinics have achieved very high levels of performance, based on the indicators. And the improvements have been greatest among the worse performing clinics, which points to greater health care equity.

But as with previous targets, these apparent improvements have come with undesirable effects.

More detailed analyses show that the quality of care was already on the rise when the QOF was introduced. The outstanding achievements of the first years soon reached their highest level and have not subsequently improved.

Clinicians have also reported a significant decline in professionalism and acknowledged the risk that financial incentives may become more important that the motivation to improve care.

Most QOF clinical indicators are condition-specific. So GPs tend to focus on managing specific chronic diseases, possibly at the expense of other conditions. And much of the QOF-related care has been shifted to nurses, who don’t financially benefit from the incentives, which raises issues about continuity of care.

Four-hour rule

The UK’s four-hour rule for waiting times in accident and emergency (A&E) states that patients should be seen, treated, admitted or discharged in under four hours.


The adoption of this standard led a quick reduction in reported waiting times. But health professionals have since raised concerns that the targets have distorted clinical decisions about when patients should be discharged and whether they should be admitted in the first place.

A&E professionals admit they feel they discharge some patients too soon. And in the ten minutes before the four-hour deadline, the admission rate jumps from one in five, to two in three patients.

Lessons for Australia

Targets and performance frameworks need to be implemented with broad consensus among health professionals. They should be used as part of a wider strategy and the focus should be on driving quality improvement (change), rather than rewarding performance.

Performance frameworks need to be based on supporting the work of health professionals rather than attempting to use them as levers of a system that is anything but mechanical by design.

It’s also important that any performance framework is coupled with thorough evaluation, so any unintended consequences can be detected, and acted on, early.

The success and failures of the UK’s performance framework can be a useful guide to help raise quality standards for health care in Australia and, crucially, avoid peverse incentives.

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