Could Pay-for-Performance Worsen Health Disparities?

Pay-for-performance (P4P) has become a prominent component of health care funding in the Affordable Care Act (ACA) era. Although the ACA's future remains unclear, these programs receive bipartisan support and will likely continue to be a part of payment policies. At the same time, racial and class disparities remain among the most pressing of the many challenges facing the US health system. We review evidence of the effects of P4P on disparities at the population and individual levels. Providers caring for predominantly minority patients or those with lower socioeconomic status are known to have poorer quality metrics. Financial penalties run the risk of exacerbating disparities along race and class lines and across hospitals. The evidence regarding P4P programs is mixed, with safety-net hospitals facing greater penalties but with some improvement in outcomes among minority patients. A better understanding of the longitudinal effects of these plans is needed, and policymakers should be conscious of the risks in expanding these programs.