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Are Performance Based Payments the Next Development in Healthcare Employment?

Performance Based Payments

According to the George Institute, a global medical research organisation, Australia will need to make significant financial reforms to ensure the sustainability of the health system. Among some key recommendations is some discussion around performance-based payments for healthcare practitioners.

Performance based payments are fast becoming a part of remuneration packages, particularly among private sector employers. For example, General Practitioners in this position are paid up to 30% of their annual salary in a bonus, by meeting key performance indicators.

In fact, many of the clients who engage our medical recruitment agency to find medical staff and locums for their job vacancies are offering some type of incentive based payment structure.

Professor Vlado Perkovic, Executive Director of The George Institute for Global Health Australia and the University of Sydney, said that real change needs to happen sooner rather than later:

“The discussion has been controversial at times, but it appears that all sides of politics are now looking for long-term solutions,” he said.

“We urge the government to act quickly, but act for the future and avoid the temptation to implement band-aid solutions that look good in the short term, but would then require further reform.”

The report made seven recommendations:

1. There is an urgent need to reform health funding, to ensure that high-quality, effective and efficient healthcare is promoted and supported.

2. While the eventual goal of reform is whole-of-system improvements, a priority for immediate reform needs to be people with chronic and complex conditions, and those who are significantly disadvantaged in access and/or outcomes.

3. A blended payment system is needed, adding to current models a broader range of capitation-based payments promoting patient-centred care. In addition, the role of performance-based payments as part of an overall funding model should be explored.

4. Change management is critical, and reinvestment of savings from other areas, including areas from outside health, will be required.

5. Linkages between healthcare providers should be strengthened.

6. Improvements in the quality of data available from existing IT infrastructure investment is needed including data linkage.

7. Moving from conversations to action needs careful planning, extensive discussion and consultation, and a staged approach.

What does this mean for healthcare practitioners?

The report identified some significant gaps in the current funding model that could be addressed through different approaches:

“Capitation-based payments, weighted for risk, provide incentives that align with delivering longterm, patient-centred, integrated healthcare including tele-health, non face to face interactions, involvement of non-medical team members and many preventative activities […] Performance-based payment systems that align with health system objectives should be explored but will need to be accompanied by investment in information systems and routine collection of data on appropriate process and outcome indicators in order to ensure that they are based on and can be evaluated using reliable information.”

So, although there are already moves by some employers in the private sector to use performance based remuneration structures, there are some entrenched issues within public health and the Medicare system that mount challenges to immediate reform. Certainly, general practice has been at the forefront of incentive based payment, but successive changes in government policy have stifled some of the progress that was made in previous years.


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