The idea behind pay-for-performance (P4P) in health care is simple: reward providers for quality care rather than the volume of services. In theory, it sounds great—better care for residents, financial incentives for providers, and a shift toward quality over quantity. But does it actually work?

A recent study published by Health Services Research examined Medicaid-based P4P programs in senior living communities. The findings were mixed. Some clinical quality measures, like reductions in physical restraints, moderate to severe pain, and pressure sores, showed improvement. However, other targeted quality measures saw no change—or even worsened. Additionally, structural quality indicators tied to payments, such as staffing levels and deficiency rates, showed little to no positive impact.

The takeaway? Medicaid-based P4P has not consistently improved care quality in senior living communities. With Medicaid covering only about 80% of the costs to care for residents, financial challenges remain. As we digest this research, it’s crucial to stay focused on delivering excellent care while maintaining fiscal responsibility.

One essential factor? Employee appreciation. While wages matter, recognizing caregivers for their hard work can be just as impactful. Celebrating small successes, providing meaningful incentives, and ensuring employees feel valued can go a long way. Still, financial realities can’t be ignored. Engaging with state representatives and health care associations may help advocate for balanced funding solutions.

Finding the right mix of financial incentives and employee appreciation is key to sustaining high-quality care. After all, motivated caregivers lead to better outcomes for residents.

Stay well and stay informed!

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State has failed to fund nursing home pay for performance program since inception 15 years ago – McKnight’s Long-Term Care News