Financial incentives (pay for performance) schemes for health professionals “can undermine motivation and worsen performance” according to research co-authored by Professor Tony Scott in the Melbourne Institute that is published in the British Medical Journal (BMJ) today.

In 1943 Aneurin Bevan the newly appointed Health Minister was given the task of introducing the National Health Service in England.

Professor Paul Glasziou of Bond University led a team of academics of which Professor Scott was a member to describe the current evidence on the effectiveness of financial incentives as “modest and inconsistent” and say that, although reward schemes can sometimes improve the quality of clinical practice, they may also be an expensive distraction.

Yet such schemes have already been adopted as a key strategy by the NHS in the United Kingdom, Medicare in the United States, and many private insurers, based on the tenet that people respond to rewards.

Scott and his colleagues have therefore devised a checklist to assess the potential benefits and harms of pay for performance schemes before they are implemented.  “While some commentators and policy makers believe financial incentives can reduce the delay between new evidence and changes to clinical practice, there are many pitfalls,” they write. “The proposed checklist is aimed at guiding implementers of financial incentives past some of these pitfalls.”