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Journal of Health Politics, Policy and Law 2006 31(3):531-556; DOI:10.1215/03616878-2005-005
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Duke University Press

Part II: Market Perspectives on Competition Policy

Horses or Unicorns: Can Paying for Performance Make Quality Competition Routine?

William M. Sage and Dev N. Kalyan
Columbia University

The competitive benefits of pay-for-performance (P4P) financial incentives are widely assumed. These incentives can affect health care through several mechanisms, however, not all of which involve competition. This insight has three implications. First, federal antitrust enforcement should continue to scrutinize P4P arrangements. Second, government needs to play a larger role in P4P than through antitrust oversight. Third, widespread enthusiasm for a particular health policy reform does not relieve policy makers of the obligation to understand its theoretical basis.






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