Essay on pros and cons of a pay for performance model


The health care industry is one of the most crucial sectors in the world that require total employee’s effectiveness and commitment. Performance in an organization determines the production levels and other initiatives that lead to the achievement of goals and objectives. All health care services must offer quality services that meet all customers’ needs and promote a healthy lifestyle. The pay for performance (P4P) model is the idea that helps in ensuring health care workers perform their duties effectively and promote quality in the sector. It forms a solid approach that rewards top-quality performance by workers in different organizations. Pay for performance model acts as a motivation concept in an organization whereby workers receive compensation based on the level of performance of each employee. The program is highly utilized in the healthcare sector today. In the present business environment, organizations pay their employees based on the performance (Mackey, Rooney, Skinner, 2009). The following paper aims at determining the risks and potential cost-saving benefits of the pay for performance model. In addition, the paper will discuss how implementing pay for performance model helps achieve healthcare goals.

Risks associated with pay for performance model

The pay for performance model involves a wide range of compensation and reward systems and individual employee’s performance on their duties affects their compensation. The models are associated with many risks as discussed below. Firstly, the financial incentives given to physicians have a higher probability of backfiring. Most professionals argue that pay for performance system helps employees put more efforts in their duties. The argument is opposed by the evidence that when an activity gets more forces from internal motivations like professionalism or promotion in the quality of work a person achieves, introducing an external motivator in terms of finances always backfires. Implementing the pay for performance model in the practice of nursing will make healthcare practitioners focus more on the financial gains and concentrate less on patients’ well-being. P4P incentive aims at making nurse practitioners exceed the organizational goals in order to attract more people. On the other hand, most practitioners will only consider the area of rewards and ignore the main role of motivation in workplaces. Alfie Kohn discovered that people working with the expectation of receiving a reward perform poorly compared to people expecting nothing from successfully completing a task. According to Mackey, Rooney, Skinner (2009), an effective pay for performance model should focus more on safety, quality, inclusion, quantity, and collaboration rather than the financial gains.
Secondly, the pay for performance incentive is its ability to cause reverse effects to those intended. People working in the healthcare sector should be more willing to assist patients than receiving compensations for work done. Most nurse practitioners volunteer in different practices within the healthcare system. Paying such people small amount of their time makes them spend less time in volunteer work. In addition, incorporating a cash incentive to a certain task interferes with the attractiveness of that task. With the limited number of nurse professionals in United States today, those already in the system would prefer achieving more financial gains and care less about the quality of services they offer. Public educational institutions preparing most nurses for the profession receive poor salaries (Yordy, 2006). Introducing P4P program for such people would make them work hard in order to get an extra coin but the outcome of their services becomes questionable.

Cost saving benefits of P4P

Pay for benefits models also have benefits towards the healthcare industry. Firstly, the type of incentives offered to nurse practitioners act a means of motivating them and increasing their productivity. People who seriously undertake the nursing professional always know hard work promotes an attractive compensation. Incorporating P4P models with other management tools creates a significant effect to the healthcare sector in terms of quality service delivery. A big number of employees value money because it acts as a special stimulus capable of modifying employee’s behaviour. The program makes employees more satisfied in their workplaces and reduces instances of money losses through employees’ asking for bribes from patients. In addition, the healthcare retains employees for a long time and saves the cost of recruiting the new workforce. On the other hand, the model offers nurse practitioners a chance to improve efficiency, quality, and quality in their areas of expertise. According to Mackey, Rooney, Skinner (2009), academic administrators recommend P4P model as the best program for improving productivity of nurse practitioners and clinicians.
Secondly, P4P model finds application across Medicaid, Medicare, and commercial insurances that help save the cost of health care. These programs offer bonus payments to healthcare sectors who achieve a four-star rating in terms of the number of patients registered under any of the health care insurance plan. The bonus offered to the organization helps in financing programs such as P4P that promote quality of services provided to patients. In addition, patients also enjoy low rates of insurance premiums from Medicare and Medicaid plans saving them the cost of health care. Moreover, changes experienced in the health sector because of implementing the program promote efficiency in operations. According to Scheffler (2010), any program that improves the productivity and efficiency in the organization helps in saving the cost of operations.

How can APRNs in TX push forward the goals set forth in Healthcare Economics of APRNs?

As the world grows, and many innovations come into existence, the role of nurse practitioners in the United States changes in both care and cost. U. S. spends much money on health care compared to any developed country in the world today. The U. S. Department of health has introduced many incentives that help reduce the challenges faced by most people while accessing health care services because of cost. Some of the measures taken by the government to help reduce the cost of health care among its citizens include introducing health insurances such as the Affordable Care Act and Children’s Health Insurance Program. The Advances Practice Registered Nurses (APRNs) have a role to play in achieving the government’s healthcare economics goals. Health economics aims at ensuring the effectiveness, efficiency, value, and behaviour when it comes to the issuance of health and health care in U. S.
In order to achieve health economics goals, APRNs should support the unique and effective quality care and ensure high levels of patient satisfaction. APRNs offer more satisfactory services as evidence from various studies whose outcomes demonstrated that patients who receive health care from APRNs record higher rates of satisfaction. As such, APRNs should make use of such opportunity in introducing programs that make more nurses understand their roles in promoting health economics goals. Secondly, health economics aims at ensuring effectiveness in the health care sector in terms of cost. The satisfaction and high-quality healthcare services provided by APRNs promote cost-effectiveness in the sector. Clinics managed by APRNs across U. S. demonstrate effectiveness through low costs, preventable patient visits, imaging studies, and nurse-absenteeism. The process helps save costs directly and indirectly for clinics, patients, and employees (Manion, & Odiaga, 2014).

How the Role of the DNP can influence change in the academic arena

The United States experienced a big shortage of nursing faculty, and the problem is expected to rise if the government takes no action. The increasing demands and the aging population contribute to the problem as the government lacks necessary interventions. The increase in the number of newly trained nurses forms the only option to this problem. People studying the Doctor of Nursing Practice (DNP) have a role to play in influencing changes in the academic arena. Firstly, DNP professionals receive education in different forms of health care provision. They can influence change in the academic arena by introducing more nursing positions in order to cater for the growing health care demands from an aging population. Availability of more nursing position in medical institutions will ensure more people enrol to the profession in order to cater for the increasing demand for health care (Yordy, 2006).
On the other hand, DNP role promotes change in the academic arena through encouraging more students to enrol to the course through such incentives as scholarships and other forms of financial support. Most people love the medicine career, but lack the needed financial support to enrol in various academic departments. DNP ensures such students get a chance of exercising their careers of interests through various scholarships. In addition, the high shortage of nurses in the country makes people secure employment immediately after getting certified as nurse practitioners (Yordy, 2006). Government support would help in ensuring DPN meets its goals and delivers more professionals to the ground in order to avoid the nursing shortage in the future.


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Practitioner, 36(4), 48-51
Manion, A. B. & Odiaga, J. A. (2014). Health Care Economics and The Advances Practice
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Scheffler, R. M. (2010). Pay for Performance (P4P0 programs in health services. World
Health Report. Retrieved October 22, 2014 from
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Yordy, K. D. (2006). The nursing faculty shortage: A crisis for healthcare. Robert Wood
Johnson Foundation