Uncertainty about the Effort-Performance Relationship in Threshold-Based Payment Schemes

Anne Sophie Oxholm, Søren Rud Kristensen, Matt Sutton

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Incentive schemes often feature a threshold beyond which providers receive no additional payment for performance. We investigate whether providers’ uncertainty about the relationship between effort and measured performance leads to financially unrewarded performance in such schemes. Using data from the British Quality and Outcomes Framework, we proxy general practitioners’ uncertainty about the effort-performance relationship by their experience with the scheme and their span of control. We find evidence that providers respond to uncertainty by exerting financially unrewarded performance, suggesting that uncertainty may serve as a useful incentive tool to extract unrewarded performance for payers.
Original languageEnglish
Pages (from-to)69-83
Number of pages14
JournalJournal of Health Economics
Early online date15 Sept 2018
Publication statusPublished - Nov 2018


  • Pay for performance
  • Uncertainty
  • Threshold
  • Provider behaviour


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