Developing a performance-based incentive program for hospitals: A case study from Maine

A health care coalition in Maine has piloted a performance-based incentive payment program that creates a single statewide program, based on common standards. Incentive payments were funded by a hospital's financial guarantee that was matched by employers. A two-step incentive allocation methodology differentiates adequate and superior performance. The incentive model is sufficiently flexible to accommodate different settings and evolving performance standards. This case study provides useful insights to payers and hospitals that are considering similar regional initiatives, emphasizing the collaborative context that underscored this venture.