Measuring health system performance.

The improvement of health system performance has become a key policy issue in most developed nations. To that end, many initiatives to measure system performance are being put in place. This paper examines the performance measurement movement from a principal/agent viewpoint. It argues that the effectiveness of performance measurement systems depends on four key factors: the extent to which the chosen performance measures reflect faithfully the objectives of the system, the nature and quality of the data, the incentives for clinicians to scrutinize and act upon the data, and the culture of the organization within which the data are deployed. Although the optimal design of performance measurement systems depends heavily on local factors, they are likely to offer a highly cost-effective instrument for securing major improvements in system performance if properly deployed.