Potential Impact of Pay-for-Performance on the Financial Health of CAHs

Publication Date: Feb 2010
Author(s): Town R, Moscovice IS
Research Center(s): Minnesota
Topic(s): Finance, Policy
Notes: Policy Brief #12

This study models the impact of different pay-for-performance (P4P) incentives on the financial health of Critical Access Hospitals (CAHs).  

The briefing papers provide greater depth and discussion than the associated policy briefs, which are designed to summarize key findings and identify important trends.  

Key Findings

  • Pay-for-performance (P4P) incentives likely reduce the financial status of CAHs already in financial stress. However, P4P incentives are likely to have only a modest impact on the financial stability of CAHs.
  • If P4P programs lead to increased hospital quality, those benefits would not have to be accomplished at the expense of putting CAHs in greater financial jeopardy.
  • CAHs should be included in future P4P initiatives to provide a clear understanding of how payment incentives affect the quality of care in small rural hospitals.
Descriptor Date File
Policy Brief (FMT Policy Brief #12) Feb 2010 Download
Briefing Paper (FMT Briefing Paper #23) Dec 2009 Download