What does "Pay for performance" refer to?

"Pay for performance" refers to providing financial incentives to healthcare providers based on their ability to meet specific performance measures, particularly those that reflect improved patient outcomes. This approach is designed to encourage healthcare professionals and organizations to enhance the quality of care they provide, thereby leading to better health outcomes for patients.

In this model, providers may receive bonuses or additional payments if they demonstrate success in key areas such as patient satisfaction, adherence to clinical guidelines, and overall health improvements among their patient populations. By linking payment to performance, this approach aims to align the financial interests of providers with the health interests of patients, ultimately fostering a healthcare environment that prioritizes quality and effectiveness.

The other choices do not fully capture the essence of "pay for performance." Charging patients based on their health outcomes doesn't reflect a standard practice in this context, and offering discounts for timely payments and reducing hospital costs without affecting quality focus on different aspects of financial management rather than directly incentivizing performance based on patient outcomes.