Pay-for-performance (P4P) strategies are typically devised as a means for aligning provider or managed care plan financial incentives to improve access to care or quality of care. States and large employer purchasers and purchasing coalitions use P4P strategies with contracted plans, while states and insurers employ the strategies with providers.

This paper explores how pay-for-performance might promote improved quality of care in California's Medi-Cal and Healthy Families programs. The work focused on three main areas:

• Detailed descriptions of the Medicaid and SCHIP managed care pay-for-performance programs in six other states
• An assessment of the desirability and feasibility of a P4P program in California based upon input and perspectives from state policy and program officials and a variety of stakeholders
• An analysis of several design options for pay-for-performance programs within Medi-Cal managed care and Healthy Families

The analysis finds that P4P presents a promising opportunity to improve plan performance — a conclusion generally endorsed by leading stakeholders. However, the paper cautions that the financial pressures facing California are a deterrent to implementation in the near future.

The complete paper is available under Document Downloads.