Payment for performance: international experience and a cautionary proposal for Estonia (2008)

This paper describes and analyses international experience and its relevance to Estonia, but it is not directly applicable to the Estonian health system. The overall objective is to facilitate further country-specific policy discussions in Estonia building on the international evidence. The hospital sector is the primary focus of this report.

The first section of the paper reviews evidence of common provider problems in all health care systems and their implications for introducing a pay for performance (P4P) system. This is followed by a review of P4P reforms in the United Kingdom and United States in particular. Throughout this analysis, there is an emphasis on the incompleteness of the evidence base and the need for careful experimentation and evaluation to inform service reform.