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PubMed2004

How are primary care organizations using financial incentives to influence prescribing?

METHODS: Primary care organizations (PCOs) in England are required to run a prescribing incentive scheme. The average payment received by general practitioners (GPs) under these schemes is not known. We conducted a longitudinal (2 year) questionnaire study of all PCOs in London and the south east of England aiming to explore the relationship between the financial incentives, the selection of prescribing indicators and success at remaining within budget. In the second year, the average reward per GP amounted to 1220 pounds (range 470 pounds-4330 pounds). Underspent PCOs made larger incentive scheme payments to their practices as did PCOs that had successfully overturned a first year overspend into a second year underspend. The size of rewards was unrelated to the selection of any particular cost- or quality-based prescribing indicator. We conclude that larger prescribing incentive scheme payments may have contributed to prescribing cost control but their effect on prescribing quality is uncertain.

Budgets↗

PubMed1992

Incentive payments to nursing homes based on quality-of-care outcomes.

The federal Omnibus Budget Reconciliation Act of 1987 specifies that a state may establish a program to reward--through public recognition, incentive payments, or both--nursing facilities that provide the highest quality care to residents entitled to Medicaid. As state policymakers, providers, and advocates consider development of systems for rewarding quality in nursing homes, including incentive payments based on resident outcomes, theoretical and practical dilemmas must be addressed. The article examines the impetus for combining incentives with outcome measures and the conceptual dilemmas that outcome-based payments pose. Issues basic to successful implementation of incentive payments to nursing homes based on quality of care outcomes are also delineated.

Health Services Research↗

PubMed2005

The impact of productivity-based incentives on faculty salary-based compensation.

In industry and academic anesthesia departments, incentives and bonus payments based on productivity are accounting for an increasing proportion of a total compensation. When incentives are primarily based on clinical productivity, the impact on the distribution of total compensation to the faculty is not known. We compared a pure salary-based compensation methodology based entirely on academic rank to salary plus incentives and/or clinical productivity compensation (i.e., billable hours). The change in compensation methodology resulted in two major findings. First, the productivity-based compensation resulted in a large increase in the variability of total compensation among faculty, especially at the Assistant Professor rank. Second, the mean difference in total compensation between Assistant and Full Professors decreased. The authors conclude that this particular incentive plan, primarily directed toward clinical productivity, dramatically changed the distribution of total compensation in favor of junior faculty. Although not analytically investigated, the potential impact of these changes on faculty morale and distribution of faculty activities is discussed.

Academic Medical Centers↗

PubMed2006

Hospital responses to pay-for-performance incentives.

Not-for-profit hospitals are complex organizations and, therefore, may face unique challenges in responding to financial incentives for quality. In this research, we explore the types of behavioural changes made by not-for-profit Michigan hospitals in response to a pay-for-performance system for quality. We also identify factors that motivate or facilitate changes in effort. We apply a conceptual framework based on agency theory to motivate our research questions. Using data derived from structured interviews and surveys administered to 86 hospitals participating in a pay-for-performance system, we compare hospitals reporting and not reporting behavioural changes. Separate analyses are performed for hospitals reporting structure-related changes and hospitals reporting process-related changes. Our findings confirm that hospitals respond to incentive payments; however, our findings also reveal that hospital responses are not universal. Rather, involvement by boards of trustees, willingness to exert leverage with physicians, and financial and competitive motivations are all associated with hospitals' behavioural responses to incentives. Results of this research will help inform payers and hospital managers considering the use of incentives about the nature of hospitals' responses.

Attitude↗

PubMed2005

Are incentive-based formularies inversely associated with drug utilization in managed care?

OBJECTIVE: To review recent studies comprehensively assessing the impact of incentive-based multitier formularies on pharmaceutical costs and utilization. DATA SOURCES: PubMed (2001-December 2003) was searched using the key terms formularies, cost-sharing, and drug costs. STUDY SELECTION AND DATA EXTRACTION: Studies addressing the impact of implementing multitiered incentive-based formularies as a central component of an outpatient drug benefit were selected. DATA SYNTHESIS: One study using pharmacy claims from 25 employers with data from 402 786 members modeled the range of anticipated plan/employer savings associated with single- to 3-tier shifts and found that, going from a single- to 3-tier benefit results in decreased plan/employer pharmaceutical costs from $650 to $494 (24% decrease) per member per year and decreased pharmaceutical utilization from 12.3 to 9.4 (23.6% decrease) prescriptions per member per year. Another study demonstrated that adding an additional tier decreased pharmaceutical utilization, with a dramatic increase in member contribution offsetting the plan's expected increase in expenditures. This shift in pharmaceutical expenditures appeared to have no effect on overall medical utilization over a 3-year follow-up. Finally, a study converting members from a single- to 3-tier incentive-based formulary, associated with two- to fourfold copayment increases, resulted in a 10% discontinuation rate for angiotensin-converting enzyme inhibitors, statins, and proton-pump inhibitors among members who were primarily hourly employees. For salaried workers, the addition of a tier to their benefit appeared to have minimal impact on pharmaceutical utilization. CONCLUSIONS: Emerging data suggest a potential inverse relationship between pharmaceutical utilization and incentive-based formularies that increase member contribution to drug costs. Future research should focus on identifying price points and percentage increases at which members are likely to begin discontinuing necessary medications.

Fees, Pharmaceutical↗

PubMed1991

How to establish business office incentive programs.

Incentive programs to help increase collections or reduce days in receivables are becoming popular among healthcare business offices. A successful incentive program addresses major issues during the planning stage and includes realistic incentive goals, simple measurement tools, meaningful incentive payments, and proper monitoring of results.

Employee Incentive Plans↗

PubMed1997

Medicare and Medicaid HMO incentive plan rules change.

Physicians and physician groups that participate in incentive plans offered by Medicare and Medicaid HMOs may be affected by a change in the rules pertaining to such plans. The change, which became effective January 1, 1997, sets a threshold percentage for substantial risk sharing for referral services; obliges HMOs to conduct annual enrollment surveys; and requires HMOs that contract with physician groups that serve 25,000 or fewer patients to obtain stop-loss protection. In addition to these rule changes, Medicare and Medicaid HMOs are now required to disclose information about physician incentive plans to Medicare and Medicaid beneficiaries who request it and report changes in incentive plans to HCFA at least 45 days before they take effect. Physicians should familiarize themselves with the changes pertaining to incentive plans to ensure that the Medicare and Medicaid HMOs with which they contract are in compliance and that they do not assume an excessive degree of financial risk for referral services.

Group Practice, Prepaid↗

PubMed2000

Using fixed financial triggers for incentive plans.

Of course, some organizations are making no changes at all, because they don't believe that financial performance will justify paying even small awards. Healthcare organizations with executive incentive compensation plans need to review existing plans with their compensation committees. Merely leaving in place incentive plans developed prior to BBA may be doing a dis-service to the executive teams, the hospital, and the board. Using the incentive plan to focus management's attention on a few key areas is still relevant, maybe more so than ever. A complete review of incentive plans--participation, opportunity levels, financial triggers, performance measures, and other factors--is an important element of total executive compensation, probably now more than ever.

Budgets↗

PubMed2000

Tracking managed care: the importance of a cash incentive for medical director response to a survey.

OBJECTIVE: To assess the impact of a monetary incentive in a survey mailed to medical directors of large medical groups and independent practice associations (IPAs). STUDY DESIGN: Mailed survey. METHODS: We mailed a survey to the medical directors of all medical groups and IPAs contracted with Blue Cross California Care, a large California managed care health plan (n = 174). After 2 mailings without any monetary incentive, we included a $50 bill in the third mailing to increase the response rate. RESULTS: Only 46 medical directors responded to the first and second mailings (response rates of 17% and 13%, respectively). The third mailing, which included a $50 bill attached to the front of the survey, yielded 78 responses (66%), for an overall total of 124 (76%). We found no significant differences in the physician organizations of medical directors who responded to the mailing with the $50 incentive compared with the physician organizations of those who responded to 1 of the first 2 mailings, although medical directors who responded without the financial incentive were more likely to report that their organization had staff for quality assurance (96% vs 82%; P < or = .03). CONCLUSION: Including a $50 bill improved the rate of response to a survey mailed to medical directors from 13%-17% to 66%.

Aged↗

PubMedDate not supplied

Rethinking incentives.

Financial incentives focused on individuals represent a naive understanding of the complexity of human motivation. This article recommends rethinking monetary incentives and moving toward the creation of workplaces that enable and allow the natural excellence that most individuals desire to achieve. Despite their wide use and superficial logic, monetary incentives have features that are toxic to systemic improvement and high performance. They often erode opportunities for true improvement, breed an atmosphere of expectation, decrease innovation, injure intrinsic motivation, and damage teamwork. When monetary "incentives" are used, we suggest directing them to a whole group or team of individuals to inspire teamwork, learning, and greater productivity.

Employee Incentive Plans↗

PubMed2004

Value rules: senior management incentives in the post-option era.

Big changes are in the news and on boardroom agendas. This is a good time for many companies to step back and think fundamentally about how senior management incentives are structured and how these programs should be redesigned for better business results. This article describes the main problems with current incentive structures. It then shows how "value rules" can help employers make better use of incentive plans and create a real stake in business units' long-term results, so that the overall structure of executive incentives consistently encourages value creation for shareholders.

Accounting↗

PubMedDate not supplied

When and how to use monetary incentives.

Will money motivate your staff to perform better? While some practice managers prefer not to use bonus incentive programs, others use them fequently and report excellent results. This article explores the benefits and pitfalls of using monetary incentives with your staff. It explores the effectiveness of bonuses compared with raises. It also considers the four qualities of effective incentive bonus programs and gives examples of both percentage bonus programs and flat-dollar bonus programs. In particular, this article includes how-to advice for structuring a new patient incentive bonus program along with the potential problems of such programs as reported by two doctors who tried them. Finally, the article explores the benefits of using merchandise rewards rather than cash and includes innovative ideas for maximizing bonuses by implementing a "cookie jar" system and dividing annual bonuses into two installments.

Humans↗

PubMed1990

Employee incentive system prerequisite criteria.

The combination of limits on reimbursement with increased competition and expenses are stimulating more health-care managers to consider installing incentive pay systems. As a solution to one set of problems, the wrong incentive system or poor timing can make the situation worse. The purpose of this article is to assist managers in deciding if incentives are appropriate and timely, and to improve the probability of success if incentives are pursued.

Cost Control↗

PubMed1990

Well-designed and well-administered executive incentive plans do work.

Executive incentive plans in the health-care industry, virtually unheard of a decade ago, are becoming a critical part of the overall integrated management system. These plans are necessary today to drive improved performance and overall success in the increasingly difficult health-care environment. This article describes (1) incentive growth, (2) the components of a successful executive incentive program, (3) how an incentive program drives business strategies, performance, and philosophy, and (4) the overall benefits of a well-designed and well-administered program.

Communication↗

PubMedDate not supplied

Practical implications of incentive systems are utilized by dental franchises.

The success of any dental practice depends, among other factors, on the critical role of staff employees. In order to encourage desired staff behaviors, incentive systems can be designed for employee dentists, assistants/hygienists and managers. A survey of dental franchises was conducted in 1987 for the purpose of examining their incentive control systems. The specific incentives employed by these dental franchises for their employees are analyzed. The implications of these incentive systems used by dental franchise organizations for all dental practices are then discussed.

Dental Clinics↗

PubMedDate not supplied

Maintaining family planning acceptance levels through development incentives in Northeastern Thailand.

The results of a two-year longitudinal study of the effect that development program incentives have upon family planning in Northeastern Thailand are presented. These incentives, implemented by the Population and Community Development Association, Thailand, included animal raising and agricultural, home industry, and environmental activities. An experimental design including baseline and follow-up surveys supplemented by a continuous monitoring system was utilized to test hypotheses on the family planning impacts of the incentives. Findings indicate that the incentives contributed significantly to the maintenance of high levels of family planning practice through the program period 1982-1984.

Contraception Behavior↗

PubMed1994

An experimental evaluation of an incentive program to reduce serum cholesterol levels among health fair participants.

OBJECTIVE: To evaluate the impact of a health fair and incentive program on the reduction of serum cholesterol levels among participants. DESIGN: Pretest-posttest control group design, with a 6-month delay between pretest and posttest screenings. SETTING: Health fair program for employees of a large midwestern school district. PARTICIPANTS: Volunteer sample among persons with serum cholesterol levels above 5.17 mmol/L (200 mg/dL). Participants were randomly assigned to experimental (N = 29) and comparison groups (N = 34). INTERVENTION: The intervention consisted of four components: a health fair, health risk information, announcement of follow-up screening, and an incentive program. The incentive program consisted of five $100 cash prizes for reducing serum cholesterol levels by 20% or below 5.17 mmol/L (200 mg/dL). The comparison group received only the first three components. MAIN OUTCOME MEASURE: Serum cholesterol levels were measured by a venipuncture, nonfasting, chemical analysis process. RESULTS: The experimental group showed a 13.2% reduction in serum cholesterol levels, and the comparison group exhibited an 11.3% reduction (P < .05). CONCLUSIONS: A health fair, consisting of information on the level of risk and how to reduce risk, and announcement of follow-up screening and incentives can reduce the risk for cardiovascular disease.

Adult↗

PubMed1999

On the Social Psychology of Agency Relationships: Lay Theories of Motivation Overemphasize Extrinsic Incentives.

Three laboratory studies and one field study show that people generally hold lay theories which contain an extrinsic incentives bias-people predict that others are more motivated than themselves by extrinsic incentives (job security, pay) and less motivated by intrinsic incentives (learning new things). The extrinsic incentives bias can be separated from a self-serving bias and it provides an empirical counterexample to the traditional actor-observer effect in social psychology (although its theoretical explanation is similar). This kind of bias may hinder organizations from organizing because people who act as principals may use improper lay theories to offer inappropriate deals to agents. Copyright 1999 Academic Press.

Journal Article↗