If not pay for performance, then what?

Austin emails me:

If physicians don’t respond to financial incentives but finances (costs) are THE problem (one can argue, but many people think that way), what is one to do?

If one punts on cost and just wants to focus on quality then what’s to be done? It’s not P4P, so what? PCMHs? Greater clinical integration? Lifestyle factors? Or do we give up on that too?

That’s a fantastic question, and I’m sure there are many answers.  But here’s mine:

I actually think we need to use sticks as well as carrots.  We should stop reimbursing so much for stuff we’d like to discourage.

To put it another way, I think if we stopped paying so much for procedures, we would do less procedures.  But it you can make a lot ordering labs or make a lot not ordering labs, then why change behavior?

Here’s another way of looking at it.  If I can see 20 patients a day, and you offer to increase my pay 5% if I do an awesome job, I could work harder, hire people, and do QI to try and make 5% more.  Or, I could just see 21 patients a day.  Guess which I’ll do.  And the latter will INCREASE costs.

It can’t be all carrots.  Sticks may not be popular, but we need them, too.

(Brief reply from Austin: Sounds like an argument for comparative effectiveness and cost effectiveness. I’d bundle it with value-based design.)

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