Impact of the Iranian hospital grading system on hospitals' adherence to audited standards: An examination of possible mechanisms

Introduction: All Iranian hospitals have been subject to a grading system which determines the payments they can charge. We examined all possible pathways through which the grading system could influence hospitals' adherence to audited standards. Methods: Using a mixed methods study we examined five stakeholder groups: hospital staff, patients, general practitioners, health insurance organisations and surveyor organisations. Data were collected via semi-structured interviews, a questionnaire survey, observation and documentary analysis. Findings: Patients and general practitioners were generally unaware of the hospital grading. Hospital staff and insurance organisations were informed, but this was not found to influence the hospital staff's choice of where to work nor the insurance organisations contracting behaviour. The grading system was criticised for the performance standards' validity and the validity of hospitals' awarded results. Hospitals responded to financial and reputational incentives for achieving better grades, although gaming and misrepresentation was also reported. Conclusion: Pay-for-performance was the main influential factor in shaping hospitals' adherence to audit standards. Other potential mechanisms for influencing hospital behaviour, the selection mechanism and intrinsic motives, were not found to be sufficient to affect hospital behaviour.