Published on November 8, 2012 at 7:08 AM
Co-author Ruth McDonald, Professor of Health Innovation and Learning at Nottingham University Business School, claimed the findings could have major policy implications.
She said: "Pay-for-performance schemes are being widely adopted, yet until now there's been little evidence that they improve patient outcomes.
"Our findings suggest they can make a positive and significant difference but that, whether they do so, depends very much on how they're designed and implemented."
Performance-related bonuses totalling -3.2m were paid out at the end of the first year, with a further -1.6m following six months later. It was agreed from the outset that the money would be allocated to top-performing clinical teams to invest in further improvements in care.
In total, information for nearly a million patients - including more than 134,000 at the hospitals that took part in the scheme - was examined.
A nationwide pay-for-performance system based on withholding payments rather than paying bonuses now operates at all NHS hospitals.
Professor McDonald added: "These schemes can seem very simple on paper, but in practice they can be very difficult to implement successfully."
Source: University of Manchester