Redefining Payer-Provider Relationships in an Era of Pay for Performance: A Social Capital Perspective

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Pay for performance (P4P) has become a leading initiative for improving the quality of care in numerous countries around the world, most notably the United States and United Kingdom. However, the scientific evidence regarding the effectiveness of P4P for improving quality is quite thin. Applying a social capital perspective to the US experience with P4P, this article offers a conceptual analysis of the relationship between payers and providers relative to the prospect for improving the effectiveness of P4P as applied to quality of care. From this perspective, a key barrier to improving the effectiveness of P4P has been that payers and providers have not worked cooperatively in the design and implementation of these financial incentive programs. However, recent developments in the US health care system, namely, the formation of quality improvement collaboratives and global payment arrangements, are helping to redefine relationships between payers and providers that support innovative payment arrangements. These relationships are being redefined in ways that are in accordance with social capital concepts such as trust, commitment, and shared purpose. As such, the US experience offers lessons for improving the effectiveness of P4P in any context in which better cooperation between payers and providers is needed.

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