Experts have warned that pay for performance or financial incentives "can undermine motivation and worsen performance". Plans based on financial incentives are already in place as part of Medicare in the United States, and National Health Service in the UK.
The views are in response to an analysis by Professor Paul Glasziou of Bond University in Australia on the positive and negative effects of financial incentives.
Glasziou and his team say that financial incentives might offer some benefits but mostly act as distractions. They have made a checklist of advantages and disadvantages of using a pay for performance scheme.
"While some commentators and policy makers believe financial incentives can reduce the delay between new evidence and changes to clinical practice, there are many pitfalls. The proposed checklist is aimed at guiding implementers of financial incentives past some of these pitfalls," the authors wrote.
Using financial incentives "may reduce their [physicians] desire to perform an activity for its inherent rewards (such as pride in excellent work, empathy with patients)," according to an editorial published in BMJ by Professor David Himmelstein, from the City University of New York, and colleagues.
Experts are worried that paying for performance "may not work simply because it changes the mindset needed for good doctoring."
According to an article published in the Journal of the American Board of Family Medicine, pay for performance accounts for almost 25 percent of family practitioners income and that these schemes have reduced waiting time and improved health management in specialist care.
However, experts now say that these schemes must be further analyzed before they are implemented.
"If such schemes must be envisaged, it is essential that their likely benefit is rigorously considered before their implementation. Glasziou and colleagues' checklist provides a salutary guide to such consideration," Himmelstein and colleagues wrote.