Pay-for-performance plans are designed to reward providers for what?

Pay-for-performance plans are structured to incentivize healthcare providers based on their ability to meet predetermined quality and cost standards. This approach encourages providers to enhance the quality of care they deliver while maintaining or reducing costs. The fundamental aim is to improve patient outcomes and overall healthcare efficiency, aligning providers' financial rewards with the value they provide rather than the volume of services delivered. This model supports a shift away from fee-for-service compensation, which can sometimes lead to unnecessary tests or treatments, focusing instead on achieving high-quality results in patient care. By rewarding providers for both quality measures—such as patient outcomes, adherence to clinical guidelines, and patient safety—and cost management, the pay-for-performance model seeks to create a more sustainable and effective healthcare system.