Value for Money in Health Spending

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Health spending continues to rise inexorably, growing faster than the economy in most OECD countries. Most of this spending comes from the public purse. Given the recent economic downturn, countries are looking for ways to improve the efficiency of health spending. This publication examines current efforts to improve health care efficiency, including tools that show promise in helping health systems provide the best care for their money, such as pay for performance, co-ordination of care, health technology assessment and clinical guidelines, pharmaceutical re-imbursement and risk-sharing agreements, and information and communication technology.

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Improving Value for Money in Health by Paying for Performance

Many OECD countries are experimenting with new methods of providing incentives to providers to improve the quality of health care, often known as “pay for performance” (P4P). Yet it remains unclear – in part due to a lack of good data – whether these new ways of paying providers (hospitals, primary care, integrated systems) significantly improve the quality of care and increase value for money in health. Experience to date suggests that it is possible to improve quality and efficiency by paying for it, for example in public health interventions such as cancer screening, and in getting physicians to follow evidence-based guidelines for chronic conditions like diabetes and cardiovascular disease. This chapter looks at cases where P4P appears to be producing good results and analyses the numerous factors that affect the implementation of incentive programmes, such as the challenges involved in establishing quality measures, collecting data, and monitoring it for performance – a prerequisite for designing effective P4P schemes.

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