Financial incentives may improve hospital mortality rates, says study

Doctor rushing down a hospital corridor
07 Nov 2012 22:00:00.000

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New research into controversial pay-for-performance schemes has suggested they may help to save the lives of NHS patients.

A ‘significant’ fall in mortality rates for certain conditions emerged in a study by health experts and economists from the Universities of Nottingham, Manchester, Cambridge and Birmingham into the use of incentives at hospitals in the North West of England.

They examined how the introduction of a scheme that paid hospitals bonuses based on measures of quality affected the delivery of emergency care. The initiative was found to be associated with a relative reduction in the mortality rate of six per cent over 18 months – equivalent to almost 900 lives saved.

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The study concludes that the possibility of incentives having a “substantial” effect on reducing deaths in NHS hospitals cannot be ruled out.

Major policy implications

Co-author Professor Ruth McDonald, of Nottingham University Business School, claimed the findings could have major policy implications. She said: “Pay-for-performance schemes are being widely adopted, yet until now there’s been little evidence that they improve patient outcomes.

“Our findings suggest they can make a positive and significant difference but that whether they do so depends very much on how they’re designed and implemented.”

The research focused on Advancing Quality, a scheme introduced in 2008 at all 24 NHS hospitals providing emergency care in the North West. The first of its kind in England, the initiative required each hospital to submit data on 28 quality measures concerning five clinical conditions.

Performance-related bonuses totalling £3.2m were paid out at the end of the first year, with a further £1.6m following six months later. It was agreed from the outset that the money would be allocated to top-performing clinical teams to invest in further improvements in care.

Saving lives

Researchers examined mortality rates for three of the five specified clinical conditions – pneumonia, heart failure and myocardial infarction. They compared the figures for in-hospital deaths within 30 days of admission in the 18 months before and after the scheme’s introduction.

The combined decrease for all three conditions was 1.3 percentage points, the equivalent of a six per cent relative reduction – or some 890 lives.

Professor McDonald, a Professor of Health Innovation and Learning, said the findings were in marked contrast to those of similar studies in America.

She said: “Research on pay-for-performance initiatives in the US has shown their effect on hospitals’ care processes to be at best modest and short-term. Evidence of an effect on patient outcomes has been even weaker, with the largest scheme apparently having no impact on patient mortality. So we have to ask ourselves what made a difference here — and it seems the answer most likely lies in how Advancing Quality was implemented.

“The combination of a competitive framework and the opportunity to get together to solve shared problems seems to be key to its success. In spite of the ‘tournament’ format of the initiative, staff from all the participating hospitals met regularly to discuss improvements. This kind of interaction was very different from the approach in the US, where large-scale ‘webinars’ were chosen over face-to-face meetings.

Difficult in practice

“All of this suggests that how these schemes are put into practice and the context in which they’re introduced can be crucial to patient outcomes.”

The research team compared data from the North West with figures from around the UK to obtain a highly detailed picture of Advancing Quality’s impact. In total, information for nearly a million patients — including more than 134,000 at the hospitals that took part in the scheme — was examined.

A nationwide pay-for-performance system based on withholding payments rather than paying bonuses now operates at all NHS hospitals.

Professor McDonald added: “These schemes can seem very simple on paper, but in practice they can be very difficult to implement successfully.”

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More information is available from Professor Ruth McDonald by email at

Emma Thorne Emma Thorne - Media Relations Manager

Email: Phone: +44 (0)115 951 5793 Location: University Park

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