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The use of financial incentives in Australian general practice

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There is considerable interest in how to improve the quality and outcomes of health care by providing better incentives, including “pay-for-performance” arrangements.1 In Australia, financial incentives in primary care were first introduced in 1996, through the Better Practice Program, which was superseded by the Practice Incentives Program (PIP) in 1998.2 The PIP offers 10 practice-level incentives, currently for: quality prescribing; early diagnosis and effective management of diabetes; cervical screening of under-screened women; continuing care for patients with asthma; encouraging better health care of Aboriginal and Torres Strait Islander patients; adopting new eHealth technologies; operating after hours; providing teaching sessions for medical students; practising in a rural location; and performing certain non-referred services in rural locations. Within the PIP framework, the Service Incentives Payment (SIP) was introduced in 2001; this is an additional payment that is paid directly to general practitioners for completing cycles of care for patients with diabetes and asthma, as well as for cervical screening of under-screened women.3

Medicare data for 2011 showed that 68% of eligible practices were registered for the PIP. Various factors can influence the response to incentives, including the size of the payment, and the financial…