Hospitals to get bonuses if patients are satisfied

Will financial incentives mean better care?


Emergency sign on open doors pointing ER rooms of a hospital.

The new chief executive of the NHS has unveiled his vision for the organisation over the next five years. In among the announcements was a plan to tie the amount of money each hospital is given to the quality of care they provide. There will be a number of ways of measuring 'quality', but significant emphasis is likely to be given to feedback from patients.

So are financial incentives the right way to encourage better care?


In a speech to the NHS Confederation, Simon Stevens said he wanted to give patients more 'clout'. The Telegraph reported him saying: "Across all NHS-funded services, we'll be pushing for a steadily increasing proportion of payments tied to performance, quality and outcomes." The newspaper confirmed that this would include feedback from patients - although how this would be assessed has not yet been decided.

This isn't a brand new idea. Already over £2 billion of NHS funding depends on the performance of hospitals. Stevens is simply saying that clinical outcomes and patients' views will play a significant part in assessing performance in future.

Meanwhile, the way other financial incentives are paid will be reviewed. According to the Health Service Journal, Stevens said: "In relation to financial incentives – such as the GP quality and outcomes framework, commissioning for quality and innovation payments and commissioners' quality premium. I can tell you now, we're going to be taking a very hardnosed review of what we're actually getting for that money and whether we can do better."

Stevens seems to be saying that the current system of incentives isn't working, so he wants to try another one.


The idea of tying financial incentives to care is one that's growing in popularity around the world. The origins came from the world of reward in businesses - where bonuses and commission depend on employees doing their best.

However, while these kinds of scheme have been proven to work on a simplistic level - such as paying employees a percentage of every sale they make - it's harder to prove their effectiveness in more complex systems - and it's tough to think of any organisation that's more complex than the NHS.

This seems to be supported by a Cochrane Review in 2011 which looked at seven systems of financial incentives used in healthcare worldwide and concluded there was. "insufficient evidence to support or not support the use of financial incentives to improve the quality of primary health care."

Even if we suppose that health professionals will be encouraged to change their behaviour with a financial incentive, there's the risk that it will skew behaviour in a way that doesn't necessarily help the patient. An experiment published in the Journal of Health Economics in 2011 asked doctors to assess fake patients and decide how to treat them. In some cases they were told they would be paid for seeing the patient regardless of the treatment, and in others they were told they would be paid for each treatment. In the study, doctors tended to give too many treatments to those for whom they were paid per treatment, and not enough to those paying a lump sum.

If you speak to medical professionals on the front line, their solution would be very different. They would say they don't need incentives to provide a better quality of care - because caring for people is what they signed up for in the first place. They'd say what they need is more time, support and resources - so they can give everyone the care they deserve.

But what do you think? Can incentives work?