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