New research highlights the hidden costs of performance-based pay in healthcare
Doctors report that performance-based pay increases administrative work and moral distress - raising questions about its impact on healthcare quality
A new study co-authored by Dr Kevin Teoh from Birkbeck, University of London, and Dr. Emma Brulin from the Karolinska Institutet, Sweden, has revealed that performance-based reimbursement systems in clinics may increase administrative burdens of doctors. It is also linked to heightened moral distress and reduced perceived care quality.
Performance-Based Reimbursement (PBR) ties clinic payments to care quality and outcomes rather than patient volume. The study examined how PBR affects doctors’ ability to provide quality care, focusing on illegitimate tasks - duties outside a physician’s professional role - and moral distress, the stress or guilt caused by ethically difficult decisions.
Using data from Sweden’s Longitudinal Occupational Health Survey in Health Care, researchers surveyed primary care physicians over three phases (2021–2023). The study assessed perceptions of PBR, illegitimate tasks, moral distress, and perceived care quality at both individual and organisational levels.
Dr Brulin commented: “This study underscores the importance for scholars to further research and stakeholders to acknowledge the link between organisational factors, staff work environment and quality of care. Staff wellbeing is rarely, if ever, considered a performance indicator of healthcare organisations.
Dr Teoh commented: “These findings have global relevance as it provides evidence that efforts to focus on specific performance metrics can have undesirable impacts on staff wellbeing and performance. Therefore, work processes and systems must meet the needs to the organisation, staff and the public.”
Key Findings from the study
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Over 70% of Swedish primary care physicians reported that PBR negatively affected their work (58.9% negative, 12.3% very negative).
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Doctors working under PBR reported more illegitimate tasks, which were linked to increased moral distress.
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Both illegitimate tasks and moral distress were associated with lower perceived individual quality of care.
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At the organisational level, an increase in illegitimate tasks was linked to lower perceived organisational quality of care, though moral distress did not have a significant impact at this level
The study highlights the need for policymakers to consider how performance measures and reimbursement structures affect healthcare workers' well-being. Reducing unnecessary tasks could help alleviate stress and improve care delivery.
The full study, Performance-Based Reimbursement, Illegitimate Tasks, Moral Distress, and Quality Care in Primary Care: A Mediation Model of Longitudinal Data, is now available to read in Annals of Family Medicine.