Doctor Bonuses Reward Volume, Not Value
According to a report from Merritt Hawkins, a big physician search and consulting firm, … 74% of the jobs they recruited for in the year ending March 31 featured a performance bonus. Of those that offered such a bonus, in 90% of the cases it was linked to “fee-for-service style volume.” Meantime, fewer than 7% of the jobs offering bonuses rewarded physicians for meeting quality or cost goals.
Full article on the Merrit Hawkins report.
It’s no surprise that firms employing physicians want to reward volume — because volume boosts revenue.
On the other hand, improving quality beyond the average (i.e. quality high enough to not get sued) does not pay any better than average quality.
A perfect example of the effects of a bad incentive structure.
Agreed. This is where some type of pay-for-performance structure may need to take hold.
Is anyone surprised by this result?
The CEO of any major corporation in America will get a bonus based on volume and profitability. The difference is that most American corporations are compelled to assure high enough quality that the public will buy the product.
Devon I think the idea that average quality pays the same than real quality is why so many of our industries are screwed up. When it comes to ignoring quality, the health care system has long rewarded simple outcomes:
a) keep the patient alive
b) campsite rule- the patient should leave better than he came in to the best of your abilities.
However when doctors are trained to put quality first, volume quickly follows. After all, people will pay more for better service all the time.