The Growing Case for Using Physician Incentives to - AcademyHealth

FOREWORD
I(salaries and/or bonuses) to providing quality
ncentives are used successfully throughout
business, government, and personal life to
improve performance. Employers use bonuses
to reward higher performers. Local, state, and
federal governments pay highway contractors
extra to finish projects early. Parents reward
their children for better grades.
In the health care industry, however, there is little,
if anything, that links physician reimbursement
care. 1 In its report, Crossing the Quality Chasm:
A New Health System for the 21st Century, the
Institute of Medicine (IOM) describes a dramatic
and painful disconnect between evidence-based
best practices and the actual practice of medicine
by most physicians.
Incentives can and should link the natural
motivational power of reimbursement and a
physician’s clinical performance. Incentives
should also be an important component of any
effort to improve quality in the American
health care system. But, while it is arguably the
ideal approach for structuring the health care
system, aligning physician incentives with the
delivery of the highest-possible quality of care is
a difficult task. As a result, incentive systems
currently in place are more likely to be linked
to productivity or utilization than to quality or
quality improvement.
Nonetheless, purchasing innovators continue
to wrestle through the challenges, and some
have implemented incentive-based strategies to
improve quality. To gain a sense of what has
been tried and achieved thus far, the National
Health Care Purchasing Institute (NHCPI)
commissioned Bailit Health Purchasing, LLC
(BHP) and Sixth Man Consulting, Inc. (6MC) to
conduct a study of quality-focused, physicianlevel
incentive strategies implemented to this
point. In this report, NHCPI seeks to document
the experience of innovators and leaders —
highlighting successes, defining barriers, and
offering lessons learned.
Kevin B. (Kip) Piper, MA, CHE
Director
National Health Care Purchasing Institute
NHCPI / MONOGRAPH
1 Dudley, R. Adams, Robert Miller, Tamir Korenbrot, and Harold Luft, “The Impact of Financial Incentives on Quality of
Health Care,” The Milbank Quarterly, Vol. 76, No. 4, 1998: pp.649-685.
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