Provider Payment and Incentives

Jon B. Christianson and Douglas Conrad

in The Oxford Handbook of Health Economics

Published in print April 2011 | ISBN: 9780199238828
Published online September 2012 | | DOI:

Series: Oxford Handbooks in Economics

Provider Payment and Incentives

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  • Economics
  • Health, Education, and Welfare
  • Public Economics



The design of incentives and the evaluation of their impact are examined in the research literature at many different levels. This article provides a background and a conceptual framework relating to the effects of payment incentives on the behavior of health care providers. It then summarizes the empirical literature on the effect of financial incentives in health care. The article offers a conceptual model of the provider's choice of the quantity and quality of output as a means of organizing our thinking about the effects of specific provider payment incentives. This article addresses the effect of general provider payment incentives on the amount and type of care provided; the evidence that general payment incentives have indirectly affected quality of care; and the impact of payment incentive programs that attempt specifically to reward providers for improving quality of care, or for achieving specific benchmark levels of quality.

Keywords: incentives; payment; health care providers; conceptual model; quality

Article.  11240 words. 

Subjects: Economics ; Health, Education, and Welfare ; Public Economics

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