The growing interest in the use of economic benefits boosts the quality of health services in an effort to minimize cost of healthcare, enhance the quality of patient care and improve the general health of the population. Throughout the history, capitated systems have allowed doctors to register a huge number of patients without ever being vigilant of quality. This has contributed to the aggregation of healthier patients or denial of care to increase the net benefit from capitated charges. Traditional fee-for – service payment schemes, on the other side, nurtured excessive-care. Salaried programs did not offer any motivation for doctors to devote more than a minimal amount of time and effort on clients. Taken collectively, neither of these payment schemes rewards high-quality healthcare. Since then, the Affordable Care Act ( ACA) and the health care customers have been searching for value-added fees or payment for performance (P4P), as part of current attempts to find incentives that can efficiently enable hospitals and healthcare providers to deliver better health care services and attain maximum outcomes for patients (Cashin, Chi, Smith, Borowitz, & Thomson, 2014).
The P4P concept was introduced in 2012 when the Centers for Medicare and Medicaid Services (CMS) initiated a presentation of P4P for hospitals through the Leading Patient Quality Incentive Demonstration (HQID). The healthcare facilities selected for the HQID decided to provide information on 33 interventions, comprising indications for three medical problems (pneumonia, congestive heart failure and acute myocardial infarction) and two surgical operations (complete hip or knee replacement as well as coronary artery bypass reconstruction). In addition, the mortality rate remained comparable over 6 years under the P4P system. According to In addition, the mortality rate remained comparable over 6 years under the P4P system. According to Cimasi (2014), there seems to be no proof that hospital-based P4P services contributed to a reduction in mortality and that the cause for this might be a lack of incentive / retribution for the hospital (facilities that scored in the top two deciles were qualified for 1-2 percent premiums in Medicare payments for this disease, while those that were not score were entitled for such incentives. Another reason for the adverse findings was that the insurers already have established internal P4P schemes in Premium and non-Premier hospitals in such a manner that no P4P impact could be identified by the time the analysis was finished.