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Incentives and Money

Posted Aug 25 2008 2:52pm
I always thought that a market incentive involved more money. But that's not the way finance people think.

At my first US job, it took only a couple of years after leaving my secure Canadian base (yes, I am being sarcastic) to find myself analyzing an incentive plan that was developed in the wake of the consumer backlash against managed care and the collapse of the forces spurring the development of the vertically integrated hospital system I had joined.

It involved dropping my income by 1/3 in exchange of the promise of making back what I earned if I worked twice as hard with no control of the patients that would be booked or the efforts that would be made to collect what I billed. Of course I would only get my incentive bonus if the hospital actually collected those billings. I could be exposed to contractual adjustments I knew nothing about and I couldn't understand why in the world an understaffed billing office worry about my $50 service when they had a $10,000 orthopedic charge to go after.

No thanks.

Not surprisingly, there is another side; a group of FQHC physicians are asking for profit-sharing

when we run nearly an operating deficit. The only reason the FQHC is sustainable are the government grants. While there may be some exceptionally well-run FQHC's that throw off enough operating margin to share with staff, we must always remember that our communities' most valuable assets are our non-profits.

I caught up with a post from the Happy Hospitalist (such an excellent blog, I can't begrudge the fact that he is beating me senseless in the Medical Weblog Awards competition for Best New Blog) where he points out how the National Quality Forum's suggestion that hospitals should be incentivized to prevent medical errors is being implemented by insurance companies. The list of never events is growing and becoming contradictory; a delirious patient cannot be restrained chemically or physically and if they fall, well... any outcome associated with age and ill-health will probably be denied. At least the insurance companies know that if they can get away from paying for the conditions associated with the terminal stages of human existence, they are likely to save a bunch of money. (Geico, please don't sue me for borrowing a few words from your slogan. I own stock in your parent organization!!!)

One day someone is going to offer me more money for less work.

I just know it.
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