Health Policy and Management (보건행정학회지)

Korean Academy of Health Policy and Management (한국보건행정학회)
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The Possibility of Expanding Pay-for-Performance Program as a Provider Payment System

성과연동지불제도의 확대 가능성 고찰

  • Received : 2012.11.01
  • Accepted : 2013.01.10
  • Published : 2013.03.31
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Abstract

This paper investigates the possibility of expanding pay-for-performance (P4P) program as a provider payment system, in terms of financial, economical, and political sustainability. In order to expand the sustainable P4P, P4P should have usefulness in terms of economic value as well as efficiency in the financial aspects of health care. More importantly, the P4P would be politically sustainable only when both providers and consumers can accept. Korea's healthcare system seems to have logical ground for the P4P program financially and economically. However, how well the P4P can work remains to be proven in its implementation. After 43 tertiary hospitals applied the P4P program for acute myocardial infarction (AMI) and C-section in 2007, the number of hospitals adopting the P4P program for AMI and C-section has increased to 316 in 2011, and an incentive for hospitals applying the P4P has risen to 2% from 1% of health insurance benefits. This shows that the P4P program introduced by Health Insurance Review and Assessment Service is quite successful. In addition, people are aware of the need for improved P4P program and policy alternatives have been already made. Therefore, it is very important to come up with politically supportable strategies that can make providers and consumers accept the P4P program while maintaining the governance of the existing health insurance policy. To this end, there are some tasks to be considered. First, the expansion of the P4P program should be placed on the agenda of the Health Insurance Policy Review Committee, the highest decision-making body, and a separate agency for P4P planning should be established. Second, for more efficient P4P program, the processes of review and assessment, currently carried out separately, should be integrated into a single process. Third, infrastructure to measure the quality of medical services should be sharply expanded. Fourth, the current paradigm for the assessment should be changed. Lastly, a P4P program for consumers should be considered. Given that the consumers in Korea can use medical services freely, the National Health Insurance Corporation could initiate the P4P program for consumers as a means of controlling excessive use of medical services and adjusting consumer's moral hazard.

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References

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