Hospitals that want to improve clinical outcomes and reduce the unnecessary use of resources should recognize that physicians will probably never blatantly ask, "What's in it for me?" But answering that question might be the key to improvement.
Of course, most hospitals already have formal programs to assess and improve the quality of patient care. Those programs often lead to the development of practice guidelines and clinical pathways. Yet many hospitals still can't improve patient outcomes rapidly or to a significant extent, nor can they sustain those improvements.
Payers, however, increasingly demand not only less-costly healthcare services but also predictable, consistent results.
Quality-improvement programs are based on the premise that practicing medicine cost-effectively can benefit patients and help the hospital financially. That sounds reasonable, but physicians need to buy into the idea. Most physicians already feel assaulted by managed-care pressures, increasing regulation and competition, and lower reimbursement. So it isn't surprising that they are less than enthusiastic about devoting more time to what they view as primarily the hospital's fiscal needs.
That's where incentives come in. They encourage physicians who aren't salaried employees to participate in clinical improvement efforts.
Why don't more hospitals use them? They may assume, perhaps validly, that the medical staff would view any incentive system as a transparent attempt to cut costs under the guise of improving patient care. Or they may have accepted the status quo, lack imagination or strong leadership, or fear liability or adverse public reaction. Finally, they may be uncertain about the availability and reliability of baseline measures.
But for progressive hospitals that want to develop an incentive program, the first step is choosing the main objective. If that objective is to promote participation in the program, the basis for recognition could be meeting attendance.
Incentives can also be based on documented results. To do that, hospitals must decide which baseline data to use, choose measurements that represent changes over which the improvement team has control and determine the length of time a significant improvement must be maintained. Examples of significant improvements would be sustained reductions in mortality rates, postoperative infections or specifically defined complications.
The next decision is whether payments should be direct or indirect for activities that are beyond the usual committee assignments associated with medical staff membership. Direct payments can be based on team participation, with the team chairman compensated at a higher level. Physicians could be paid a flat rate per meeting attended, for example, or by the hour.
Another form of direct payment is gain-sharing, which is compensating nonemployee physicians for documented improvements in the financial performance that is associated with changes in clinical decisionmaking.
Indirect payments can be made through grants to support individual continuing medical education or research.
An approach that's reasonable for one hospital may be unworkable for another because of differences in state laws and regulations, corporate culture and values, physician attitudes, and organizational experiences with incentives.
Regardless of the specifics, all incentives programs should be:
* Simple to administer. The ease of administration is reflected at least partly by the amount of time needed to direct the activity and the amount of infrastructure required.
* Legally permissible.
* Ethically appropriate.
* Publicly acceptable. For example, in managed care, there has been a public outcry because of the perception that physicians have an incentive to see more patients and spend less time with each. The criteria for the program should be defensible.
* Substantive enough to influence behavior. For example, paying $50 per hour to motivate physicians to attend meetings would usually be insufficient.
* Structured to give timely rewards. Physicians should be compensated as soon as possible after the improvements have been made.
* Realistic. The program must be easy to communicate and understand. It must also use measurable goals, be funded appropriately and be easy to monitor and assess.
In developing the program, the following sources should be consulted:
* An extensive review of professional publications and discussions with hospital managers who have enough experience with an incentive system to give informed advice. Such managers can be found through networking at professional meetings.
* Legal counsel.
* Physician focus groups.
* The medical staff's governing body.
* The hospital board.
The program must be systematically monitored and refined. If results don't meet or exceed expectations, the incentives may be inadequate, or other modifications may be required. Participants deserve timely feedback about their performance, and regular reports should also be distributed to management, the medical staff and the board.
There are obstacles to launching an incentive system. Depending on the hospital's culture and physician compensation arrangements, management may be uncomfortable about undertaking a program that could fail or be disruptive.
However, taking all the steps-planning, consulting extensively with physicians, gaining formal approval, disclosing the details of the program internally and implementing the program on a pilot basis-increases the likelihood that the program will strengthen, rather than compromise, medical staff relationships.
There are also pragmatic issues: Management must provide enough staff to develop and oversee the program, fund it and persevere against inertia.
Meaningful incentives can have a powerful impact on physicians' commitment to delivering cost-effective care. With many studies documenting wide variations in clinical practice, maintaining the status quo essentially condones mediocrity. Patients deserve better.
Hofmann is senior vice president of Aon Consulting's healthcare practice in San Francisco. He works with health systems and hospitals on clinical and financial improvement.