Pay for Performance Ethical Issues

Pay for Performance Installment # 2 

April Mitchell & Colleen Lau 

Pay for performance is one solution being implemented to help decrease the cost of 

healthcare in the United States. Like many of the other solutions proposed, this plan has several 

issues. The widespread implementation of pay for performance will lead to many ethical issues 

for physicians to consider. 

Physicians swear by the Hippocratic Oath where they promise to uphold the standards of 

beneficence and nonmaleficence to all patients that they treat. Along with the Hippocratic Oath, 

physicians also have certain morals as their own internal motivators to offer the best of care to 

patients. The moment when physicians decide to join the pay for performance program, they 

have agreed to receive a certain amount of money for achieving certain goals and sometimes 

they are not medical goals. The point of the goals is to increase the quality of care offered to 

patients but physicians are already expected to offer the best quality of care to their patients due 

to the Hippocratic Oath. The incentive therefore acts as an external motivator and is the carrot 

that is dangling to coerce physician into offering better quality of care. This means that the 

moment that physician signs up to be in a pay for performance program, the first ethical issue 

that arises is that physicians are being coerced into changing their behavior in exchange for 

money. 

After being in pay for performance programs for a period of time, another ethical issue 

that arises is physician trustworthiness. Physicians over a period of time may feel that they are 

entitled to the incentives offered through pay for performance programs and take advantage of 

the system. The trustworthiness of physicians is at stake because physicians may take advantage 

of the system and this leads to a breakdown in the trustworthiness of physicians. It can be 

expected that there will be physicians who will take advantage of pay for performance programs



since there has been evidence of physicians in other countries with similar programs taking 

advantage of this payment system (Hartocollis, 2013). 

An example of physician taking advantage of pay for performance programs which can 

lead to breakdown in physicians’ trustworthiness starts with the target set for the physician. A 

cardiologist target may be to do less than 90 open heart surgery in one year in order to get 

incentives. After reaching the quota, the cardiologist discovers that there is another patient that 

needs open heart surgery. The cardiologist decides to push for a stent in order to get incentive but 

the patient really needs open heart surgery. In recommending the stent instead of open heart 

surgery, the cardiologist is not being truthful with the patient and also indicates that the 

cardiologist is not trustworthy. 

The third ethical concern is the implementation of the pay-for–performance program 

could adversely affect the care of the patient by creating negative incentives for physicians to 

maintain beneficence for the patient. In the article, Can Hospital Chains Improve the Medical 

industry?, a surgeon specializing in joint-replacement surgeries stated, “Customization should be 

five per cent, not ninety-five per cent, of what we do” (Gawande 2012). Knee surgeries or other 

joint replacement surgeries can be standardized for the best outcome and care for the patient. 

Corresponding to the pay-for-performance program, for every successful knee surgery the 

surgeon performs there is more incentive to stick to the successful standardized plan. Each 

patient who requires this procedure receives positive consistent results and the physicians are 

paid accordingly; everyone wins. This situation shows how the pay-for-performance program 

can be successful and ethical. 

However, not all problems that patients come in with can be treated with a standardized 

protocol. For example, performance targets require that diabetic patients achieve hemoglobin



levels below 7.0 to be deemed adequate quality of care by the doctor. In patients with previous 

hypoglycemic episodes, however, this target might be life threatening (Wharam 2009). Healthy 

hemoglobin levels are different for each patient because of a patient’s personal and medical 

history. A physician knowing this would keep a diabetic patient’s hemoglobin levels higher than 

the standardized level to ensure a better outcome for the patient and to prevent hospitalization for 

the hypoglycemic episodes. The patient is happy, but the physician is not paid equivalent for her 

quality of care. The physician now has negative incentive to maintain the patient’s best interests. 

In another instance, a diabetic patient who has hemoglobin levels consistently higher than 7.0 

and does not attend scheduled appointments for his diabetes. He finally comes in to see his 

physician to complain about an acute knee pain (Wharam 2009). The physician sees that the knee 

problem is much easier to fix and almost guarantees a successful outcome may only treat the 

acute knee problem rather than the uncontrolled diabetes. The patient’s knee is fixed, but not his 

hemoglobin levels so their overall health has not improved. The physician is paid for the 

successful treatment of the acute knee pain while the hemoglobin levels still remain 

uncontrolled. 

Performance targets not only affect one patient but specific vulnerable populations as 

well. This population may include patients with multiple chronic illnesses or who are in poverty 

(Wharam 2009). This is an issue of physicians maintaining beneficence and the distributive 

justice of certain populations. An example is the diabetic patient who infrequently makes 

appointments with his doctor may be unable to afford the expensive co-pays to control his 

hemoglobin levels. Physicians will choose not to see new patients that cannot afford treatments. 

For example, physicians may decline to accept patients who are covered under Medicaid. 

Populations in poverty face more health hazards and it may be harder for a physician to help



these patients. Patients that have multiple chronic illnesses are likely to suffer poorer outcomes 

than patients with acute pain. Since patients with multiple chronic illnesses require more time 

and work from physicians. If the patient cannot make performance targets the physician will not 

receive the pay for the longer hours spent with this type of patient. The physician may 

presumably build a better interpersonal relationship with this type of patient and family which 

will equate to better patient quality of care, but that is not reflected in the pay-for-performance 

program implemented now. Physicians may choose to ignore these populations because the time 

and effort spent in these patients will not improve their health to match the expected performance 

targets. This limits vulnerable populations’ access to health care, even though the pay-forperformance 

program was formed to improve and standardize quality of care of all patients. This 

creates an unequal dynamic of care for vulnerable populations who need more long-term care. 

The pay-for-performance system does not yet incorporate pay for physicians who take care of 

chronically ill patients that require more than just a prescription. These patients can be time 

consuming, need individualized attention, and may have economic issues due to high costs of 

treatment and hospital visits. Until the pay-for-performance system measures performance by the 

success of the recovery and the satisfaction of the patient then these physicians will not be paid 

to take care of vulnerable populations. 

The health care system in the United States is costly, disorganized, and 

inaccessible for many population groups. The Affordable Care Act including pay for 

performance was created to improve accessibility, patient care, and lower health care costs. 

However, this plan uses a carrot and a stick ideology to motivate physicians to improve patient 

quality of care. Physicians are already are in this field to try to help patients and serve as a 

paternalistic role in a physician-patient relationship. Physicians also want to be paid for their



services. Physicians who try to take advantage of this payment plan and its incentives risk the 

ethical issues of trust and beneficence by committing fraud, coercion, or negligence. These errors 

in judgment will cost the physician patients as well as insurance companies’ costs. These 

insurance company costs will be reflected in what the patient has to pay. Physicians who want 

the biggest “carrot” or incentive will choose to ignore vulnerable populations that are harder to 

treat and improve. This raises distributive justice concerns and decreases access for certain 

populations. The health care system definitely needs to be amended in this country, but the pay 

for performance plan may be going about it the wrong way.

References 



de Brantes, F. (2007, June 15). What's really working in P4P? Managed Care Outlook, 20(12), 1. 

Gawande, A. (2012, August 13). Can Medical Chains Improve the Medical Industry?. The New 

Yorker. 

Hartocollis, A. (2013, January 11). New York City ties doctors' income to quality of care. New 

York Times. 

Robeznieks, A. (2007, September 3). P4P programs quadruple; Physicians, regulators still 

question use of plans. Modern Healthcare, 37(35), 10. 

Wharam, J., Paasche-Orlow, M., Farber, N., Sinsky, C., Rucker, L., Rask, K., & ... 

Sulmasy, D. (2009). High quality care and ethical pay-for-performance: a Society of 

General Internal Medicine policy analysis. Journal Of General Internal Medicine, 24(7), 

854-859. doi:10.1007/s11606-009-0947-3

Pay for Performance Ethical Issues

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