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“It’s All About Incentives”
by Paul McLeod, M.D., MED3OOO Chief Medical Executive
The behavior of every stakeholder in our healthcare system can be influenced by incentives. As the cost of care continues to climb without similar improvements in quality, we must conclude that current incentives actually represent a barrier to the efficient, coordinated, evidence-based patient care that leads to optimal outcomes. Most healthcare costs, like hospital admissions, surgical procedures, and diagnostic services, represent revenue for providers who are incented to provide such services. Some relatively new programs are attempting to create much better incentives, while adding the patient to the stakeholder list. The coming year will see many of these initiatives develop momentum.
Incentives for Patients
Consumer-Directed Health Plans (CDHP)
All CDHPs combine financial risk on the part of the patient with attempts to provide cost and quality information. Out-of-pocket first-dollar costs to patients in the form of high deductibles create a significant incentive for them to take an active role in health care decisions.
Lifestyle Incentives
It is no secret that patients who smoke have higher health care costs than those who do not, and that patients who are extremely obese and inactive are more expensive to care for. In response, some employers create financial incentives to alter employee behavior. Some employers choose to reward those who make changes (“carrot” approach), while others are going straight for the pocketbooks (“stick” approach) of those who are not willing to participate in wellness programs or comply with treatment guidelines for chronic diseases.
As an example, starting in 2008, Kellogg Co., the Battle Creek, Michigan, cereal giant will raise premiums for salaried and non-union employees by $360. But it will also offer what it describes as financial incentives to employees who take a voluntary health risk assessment and participate in wellness programs.
Incentives for Physician Providers
Pay-for-Performance
As a provider incentive, pay-for-performance programs need to be substantial enough to drive change and must be based on accurate information about cost, efficiency, and quality as they relate to outcomes that really matter. A lack of validity in collecting and reporting data has left many physicians frustrated. Any attempt to link payment and performance must be reliable and reproducible. Focusing on a smaller set of measures that can significantly improve the burden of suffering from chronic disease makes a great deal of sense.
Public Reporting
Public reports (transparency) are designed to drive system change by providing physicians with comparison data, incenting payers to reward high performing providers, and providing information to patients so that they can choose their care and providers more wisely. Physicians have the same data validity concerns about public reporting as they do with respect to pay-for-performance reporting. Data integrity, sample size, and misleading rankings can serve to motivate by intimidation.
Incentives for Hospital Providers
In late November of 2007, the CMS outlined a proposed value-based purchasing program for hospitals. This government-sponsored version of “Now You See It – Now You Don’t” would reduce DRG payments to hospitals for Medicare patients and then give hospitals the chance to “earn” the money back by meeting performance criteria, thus verifying the suspicion by providers that “incentives” do not represent new money.
Indeed, it is all about incentives. At MED3OOO, we are skilled at providing our clients with reporting, information systems, and practice efficiencies that truly differentiate them from their peers. We can help position you to perform well under these or new incentives in the coming years.
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Getting That
Second Wind
When the clock struck midnight on New Years Eve, people everywhere were resolving to eat better, take better care of themselves, and get healthier. We have the opportunity to help them reach their goals in the new year.
Speak to patients about healthy lifestyle choices for the coming year and about starting a diet and exercise program that is right for them. The stress and demands of life can cause many people to feel run down at this time of year. Many “fad diets” tend to be counterproductive even to those with the best of intentions, and can cause patients to feel fatigued, zapping them of the energy they need. Too often, they are lured by advertising propaganda and social myths to try to perk themselves up by taking vitamins and other nutritional supplements or downing large amounts of caffeine containing beverages. In most cases, these measures are useless and can sometimes cause harm.
We need to feed our bodies with the best type of fuel. The following are some nutritional guidelines that you should consider sharing with your patients:
Avoid diets that distort nutritional balance.
Make complex carbohydrates a main part of your meal. Avoid simple carbohydrates alone. Always combine them with a protein.
Consume large amounts of fruits and vegetables.
Fat is essential. However, fat in large quantities can make you sluggish.
Eat enough protein.
Don't rely on supplements for energy. Try to meet the body's needs for essential nutrients from foods, not supplements.
Don't skip meals or go on fasts.
Drink alcohol only in moderation.
Don't rely on caffeine as a pick-me-up.
Think of physical exercise as a dietary requirement and meet it regularly.
Helping patients take a commons sense approach to their nutrition will help them to lead a high energy life.
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