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What do Wall Street Bonuses and HCIT Incentives Have in common?

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What do Wall Street Bonuses and HCIT incentives have in common?



Does "Pay-for-Performance" send the same wrong signals?








A central piece of healthcare payment reform has been instituting pay-for-performance (P4P) incentive programs. Each of these has specific data reporting requirements, with very explicit implications for many aspects of HCIT systems. And closely related payment reform initiatives such as “Present on Admission” and delineation of negative events ("Never Events") for non-payment represent examples of disincentive programs. A reasonably succinct, well referenced summary can be found

here.




Incentive systems are in many cases extremely important, and unquestionably drive behavior. Numerous drivers of current P4P and D4M (“docking for mediocrity,” an expression from Atul Gawande's 2004

The New Yorker article, “The Bell Curve”) reform initiatives are based on the fact that existing systems

pay for procedures, independent of their value, quality, or appropriateness. Therefore, given this context, a reflexive drive for P4P is completely understandable and perhaps reasonable.




But I was struck today by the potential shortcomings P4P could generate across the healthcare industry while reading Thomas Frank's WSJ article, "

Wall Street Bonuses Are an Outrage - The public sees a self-serving system for what it is." (WSJ, February 4, 2009) In it, he wrote:




According to Bill Black, a professor of economics and law at the University of Missouri-Kansas City and an authority on dysfunctional financial systems, "It is the compensation system that has proved to be the weak point in everything critical that went wrong, that has produced a global [financial] catastrophe."




At each stage of the disaster, Mr. Black told me -- loan officers, real-estate appraisers, accountants, bond ratings agencies -- it was

pay-for-performance systems that "sent them wrong."




This perspective that P4P has its hazards should not be lost by those of us in healthcare delivery, HCIT or by our professional organizations. Here's one example to support my thoughts on the subject:





"

There are a multitude of organizational, technical, legal and ethical challenges to designing and implementing pay for performance programs,

" AAFP




Let's not waste the catastrophic lesson Wall Street has learned as we incentivize reform and further automate healthcare delivery and its payment.






----

Pay-for-Performance Concept Map:


--- source: http://www.loosetooth.com/Viscom/gf/odnc102804.htm











What do Wall Street Bonuses and HCIT incentives have in common?Does "Pay-for-Performance" send the same wrong signals? A central piece of healthcare

Comments

Thanks Anthony. I was listening to NPR last night while washing the family dishes, prior to putting those pre-washed dishes in the dish washer. Sadly, that last pre-wash part makes sense to all of us.

The NPR story was about Parkinson Disease research and how it would certainly accelerate with the scientific enlightenment already underway. That's independent of the "stimulus" package.

So, I second your hope that we will soon, under the NIH's CTSA program, "cure everyone and go home".

Very well said Joe. It's a mammothly complex problem, but that doesn't mean it's insurmountable. Perhaps instead of throwing $900 billion into a "stimulus" package (much of which is mere "sweetener" or pork to get votes), we could put it all into disease research, cure everyone and go home. :)

Anthony,

Thanks for the kind words and insight.

I strongly agree that professionally visioned and delivered incentive programs, including P4P are essential. When I use the word 'professionally,' I mean in the broad leadership sense, and not specific to the more narrow professions: medical profession, the healthcare financial profession, information management, operations, or performance improvement professions. All need to play a role.

An executive VP of a health system, Dr Charlie C, twenty years ago said simply "the character of a physician is well established by age 5 (five) trying to micromanage character is a misplaced effort." This dovetails your point, that a caring physician, then and now, follows up on every lab they order, usually within one day of the result being available.

P4P programs and short-sighted incentive programs, along with the factors outlined in the AAFP quote have, in too many cases, created a penalty for truly caring for the patient. Unintended consequences, again.

For example, because of the combination of legal implications, it is much, much safer for physicians to not look at (captured in the audit trail) results for patients that are currently in another physicians care. This occurs during in-patient cross coverage, and in an ambulatory setting when a specialists is referred for an opinion and not for management. If the interested, caring physician sees an abnormal result, and the other accountable physician doesn't see and act on it (at least by documenting their awareness), the caring physician in the audit trail is accountable. The non-caring, not-currently accountable physician who doesn't look is not accountable. They should be protected to ensure the best possible safety net. (There's a precedent with Good Samaritan laws, at least in terms of the intent.)

As the AAFP has described (follow their link above for more), P4P alone is not the only way to move forward. To your point, Anthony, we need to add mechanisms to recognize care coordination and management.

Part of why I enjoy the blogs here is because it's clearly a team sport. HCIT done well is critical, as is P4P, and better care management paradigms. They work together, or need to. They may look like Medical Home, or loosely-to-untethered PHRs, to Enterprise-class coordinated care offerings. No one solution is going to meet the needs of our complex care delivery system.


Good topic Joe. I am strongly in favor of a P4P approach to healthcare, as I am a firm believer in creating strong financial incentives to elicit desired behavior, and also injecting market forces and Darwinian competition into all areas where the government currently holds a monopoly.

A perfect example is the TARP program, which created a huge pool of money for those that met certain criteria, most easily defined as being a bank holding company. While the program was intended to help companies that at the time the program was announced met the criteria, an untended consequence is that companies began embarking on legal metamorphoses to meet the criteria. So alluring was the money that they, in fact, changed their DNA to get at it.

Organizations that converted into bank holding companies to get TARP monies include:

  • American Express Co.
  • Goldman Sachs
  • Morgan Stanley
  • CIT Group
  • Discover Financial Services
  • GMAC

If one had begun with the intention of creating more bank holding companies, for whatever reason, a more effective program could not have been crafted. Create the financial incentive for anything to happen, and it will.

A friend of mine was recently frustrated by the fact that her daughter’s physician had obviously not reviewed the chart — though new test results had come in — since the last time they were in the office (the last reimbursable event). As we all know, the current model does not pay physicians for getting people well, we must rely on their good nature and professionalism for that. If, however, that doctor knew a significant financial incentive rested on the outcome of her patient — however that outcome would be defined — I assure you the physician would have booked fewer appointments, preferring to spend her time reviewing the young girl’s case, among others that required extra attention.

Revamping the healthcare system to rely on anything other than financial self interest is foolish, as expecting doctors to be immune from the less attractive aspects of human nature is naive. P4P is the only way to move forward. The strategy is sound; the tactics need much attention.