England can learn from Portugal’s pay for performance model in primary care

Recent publication of the NHS’s 10 Year Health Planfor England, with its renewed emphasis on pay for performance, presents an important moment to reflect on past models like the Quality and Outcomes Framework (QOF) and to learn from international experience.

QOF, launched in 2004, was a pioneering effort to improve primary healthcare through a pay for performance model. The framework financially rewards providers for high performance or quality. Two decades later, however, the limitations of this approach have become evident. The initial gains in quality have plateaued, a trend that has been interpreted as “incentive fatigue.”1 General practitioners are increasingly demoralised with their work as the administrative burdens and job complexity continue to rise,12 emphasising that financial incentives are only effective when they reinforce professional purpose and promote cohesive teams, autonomy, and good working conditions.

If pay for performance models are to help overcome the current challenges in primary care, they must go beyond direct reward mechanisms tied to target achievement. In this regard, Portugal’s experience of using financial incentives in primary care offers valuable lessons.

Since 2005, Portugal has undertaken a major reform of its primary healthcare system, with the creation of family health units and the implementation of a performance based indicator system. This model introduced two types of family health units: model A teams operate with fixed salaries, whereas model B teams combine a base salary with incentives linked to clinical, organisational, and access indicators.34 Over time, model B units have consistently shown better quality of care across various areas of service delivery, without compromising equity or the quality of care in services not assessed by indicators.56

The difference lies not only in the financial aspect, but in how the system works. There are fewer and simpler indicators than those in England’s QOF, and the incentives reward team performance rather than just individual metrics. A key feature of the model is built-in autonomy: teams have greater decision making power over their internal organisation and the indicators they choose, and institutional incentives are linked to access to training and improved working conditions.35 In 2024, Portugal strengthened this approach by extending model B to all family health units, while retaining a category of primary healthcare units (known as UCSP) where pay for performance is not used, despite the presence of contractually defined health indicators.

By contrast, QOF started with clear aims, but has revealed its limitations.78 Although the model was designed to support workforce stability, retention challenges in primary care persist, shaped in part by increasing workloads, rising multimorbidity, and systemic pressures that go far beyond QOF itself.

The Portuguese experience indicates that, for a pay for performance model to succeed, it needs to involve more than simply paying clinicians to meet set targets. Indicators must be focused and evidence based. A smaller, well chosen set of metrics helps prevent the administrative burden that became apparent under QOF.

The Portuguese model connects performance with access to training and improved working conditions by allocating institutional incentives that can be used to acquire resources for the family health unit or to support professional development. The model’s main strength lies in combining team based incentives, professional autonomy, and a limited set of meaningful indicators, which together foster motivation without generating unnecessary bureaucracy. National analyses have shown consistent improvements in quality indicators, without compromising equity, supporting the model’s effectiveness in both clinical outcomes and team engagement.6 This makes it a rare example of a pay for performance scheme that successfully balances measurable results with core professional values.

Despite the positive results, it is not a miracle solution. The generalisation of model B has brought new pressures: high workload, territorial inequalities, and administrative complexity.5 As in the UK, financial incentives alone are not enough to ensure satisfaction and retention. A more flexible version of the model, adapted to the needs of the teams, could help balance quality and professional wellbeing.

In the face of global challenges facing primary healthcare, it is urgent to rethink pay for performance models. Incentives will only have a real impact if they meet patients’ needs, reinforce professionals’ values, strengthen teams, and adapt flexibly to teams’ needs.