Pay-for-performance (P4P) — linking hospital staff payment to measured ward performance — was introduced in Iranian public hospitals through a ward-level performance measurement program administered by the Ministry of Health and Medical Education. The only direct evaluation is a 2019 single-site, six-month before-and-after case study reporting rising bed occupancy, imaging volume, non-physician income, and self-reported motivation. That study left open whether P4P causally and sustainably improves clinical quality, efficiency, and equity; what it costs relative to its effects; and whether performance scoring administered by the ministry itself can be valid and credible. No multi-center, controlled, or economic evaluation of this program exists, no independent auditing arrangement has been established, and international P4P evidence remains low-certainty and context-dependent: the problem remains open.

Background

Pay-for-performance (P4P) is a payment strategy that ties provider income to measured performance — for example, service volume, documented quality, or patient satisfaction — rather than to fixed salaries or undifferentiated fee-for-service. Iran's Ministry of Health and Medical Education (MOHME), which both governs and operates the country's public hospitals, extended P4P to hospital management through a ward-level Hospital Performance Measurement Program in which roughly 30 performance indices are assessed per ward and the resulting scores feed into staff and unit remuneration. This built on an earlier Iranian P4P instrument, the national hospital grading programme, which linked the charges a hospital could make to its annual performance grade; multiple case studies of that earlier scheme found that hospital behaviour did respond to the financial incentives, but also serious concerns about the validity of the grading standards, gaming, misrepresentation of data by hospitals, and other dysfunctional consequences, attributed in part to the poor quality and non-independent conduct of audits. Against this backdrop, Aghajani and colleagues (2019) reported the first direct evaluation of the ward-level hospital P4P program: a mixed qualitative–quantitative study in a single 614-bed pilot public general hospital, comparing six months before and six months after implementation. Under the previous, non-performance-based payment regime they found no statistically significant correlation between service volume and staff payments; after P4P they reported increases in bed occupancy (from about 0.67 to 0.78), monthly imaging volume, non-physician staff income, and self-reported motivation to provide high-quality services. The authors themselves emphasized the limits of this evidence: a single hospital, six-month windows, no control hospital, P4P introduced alongside other managerial actions, performance scoring administered by MOHME rather than an independent body, and no clinical outcome or cost data. Internationally, the 2021 update of the Cochrane review of P4P in low- and middle-income countries concluded that effects are mixed and of low certainty, depend heavily on scheme design and context, and that rigorous evidence on health outcomes, equity, and costs remains scarce — so global evidence cannot substitute for an evaluation of this specific hospital-based scheme.

Problem Statement

Determine whether Iran's ward-level hospital pay-for-performance program — in which MOHME-administered ward performance scores feed into hospital staff payment — sustainably improves clinical quality, efficiency, and equity at acceptable cost, relative to non-performance-based payment. The open issues are, jointly: (i) whether P4P sustainably improves clinical quality, efficiency, and equity across hospital types (teaching versus non-teaching, different regions) and extends to clinical outcomes rather than only utilization and revenue, given that the only direct evidence is a single-site, six-month, uncontrolled before-and-after study whose reported changes coincide with concurrent managerial actions and health-sector reforms; (ii) whether the programme's net effects on health outcomes and system costs are acceptable, conditional on reliable measurement of quality; and (iii) whether credible performance measurement requires an independent regulatory and auditing arrangement rather than scoring administered by the ministry that operates the hospitals, including whether ministry-administered scores are systematically biased and whether the scheme induces unintended behaviour such as gaming, over-documentation, or distorted clinical priorities. The evidence required by strands (i) and (ii) does not yet exist, whereas strand (iii) is resolvable from the existing record on the programme's predecessors and on current Iranian measurement arrangements. These strands jointly decide a single policy question: should the Iranian hospital P4P model be sustained, redesigned, or abandoned as an instrument of public-hospital governance, or is the existing record insufficient to decide?

References

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