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Health Quote by Michael E. Porter

“Pay-for-performance will only raise costs if providers get higher pay for process compliance but do not have to compete on results.” quote by Michael E. Porter
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““Pay-for-performance will only raise costs if providers get higher pay for process compliance but do not have to compete on results.””

Michael E. Porter

About This Quote

Source Article: Harvard Business Review, “Pay‑for‑Performance and Cost Management”, 2019

Linking payment to process compliance without outcome competition can increase expenses.

In simple terms: Paying for checklists, not results, raises costs.

Key Takeaway

Tie compensation to measurable outcomes.

Themes

economics healthcare incentives

Mood

analytical critical

Type

theoretical policy

When to use this quote

  • hospital administration
  • policy design
  • provider contracts
  • budget planning

Key Concepts

cost control performance metrics

Questions to Reflect On

  • What metrics best capture true performance?
  • How can we ensure fairness in outcome‑based pay?
A Different Perspective

If outcomes are hard to measure, the model may fail.

3.8 out of 5 (10 ratings)

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