ACO Math
Linda Gorman explained the problem of pay-for-performance with teachers: because of the small number of students per teacher, average student test scores can be more influenced by outside-the class-room size than by what the teachers are doing. As a result, a P4P scheme can end up rewarding bad teachers and penalizing good ones.
Austin Frakt has identified an additional problem in rewarding Accountable Care Organizations for their performance. In order to get around the small sample size problem, ACOs have to have at least 5,000 patients. But the larger the number of patients, the more physicians that are needed. And if gains are shared equally (rather than apportioned on the basis of marginal product) the larger the number of doctors, the less incentive anyone of them has to meet group goals.
“average student test scores can be more influenced by outside-the class-room size than by what the teachers are doing”
Not just the size, but the doings as well.
Indeed. Family life is probably one of the most important factors in children’s education.
Which is something most people forget about these days.
True, people are more keen on relying on PTA meetings and such to motivate their children than their own discipline.
Because most of those parents don’t have any discipline to pass on.
In most households both parents work and only see their children for a few hours a day thanks to trickle down economics.
Change that and we could really make some improvements.
“ACOs have to have at least 5,000 patients.”
That’s a rather large group. One can imagine the entirety of some of the smaller towns in America not being able to overcome that problem, even with the enrollment of the entire population.
“As a result, a P4P scheme can end up rewarding bad teachers and penalizing good ones.”
More than just the P4P schemes do that in the American education system.
It’s just about everything in the system.
“an additional problem”
Yet another…
They never end.
Yep. As long as government lives there will be problems.
As long as man lives there will be problems, government or not.
“And if gains are shared equally (rather than apportioned on the basis of marginal product) the larger the number of doctors, the less incentive anyone of them has to meet group goals.”
This is true in a variety of things, so much so that I’m surprised people have to be reminded of it.
Thanks for the post John!
How about P4P for politicians? The current federal legislature would be owing us money about now.