Incentives and provider payment methods

The mode of payment creates powerful incentives affecting provider behavior and the efficiency, equity and quality outcomes of health finance reforms. This article examines provider incentives as well as administrative costs, and institutional conditions for successful implementation associated with provider payment alternatives. The alternatives considered are budget reforms, capitation, fee-for-service, and case-based reimbursement. We conclude that competition, whether through a regulated private sector or within a public system, has the potential to improve the performance of any payment method. All methods generate both adverse and beneficial incentives. Systems with mixed forms of provider payment can provide tradeoffs to offset the disadvantages of individual modes. Low-income countries should avoid complex payment systems requiring higher levels of institutional development.     

New methods of financing and managing health care in the Russian Federation

Poor outcomes in Russian Federation health care performance have led to greater efforts being devoted to the search for new methods of finance and management. The new financial and managerial scheme was designed to introduce elements of market relations into a highly bureaucratic system. Strengthening the primary care sector and granting providers more economic freedom were intended to increase the quantity and quality of medical care, and make it more accessible to the population. In the late 1980s, economic experiments started in several regions of the country. This paper highlights the new methods of management, payment of providers, and quality assurance that were the focuses of the experiments. The impact of the experiments will be discussed.     

Incentives for physician teams: Effectiveness of performance feedback and payment distribution methods

Best practices in team-based incentive design remain underexplored. This study examines under group-based pay-for-performance, how managers incentivize physicians for teamwork through internal feedback and payment distribution methods. In collaboration with Taiwan Association of Family Medicine, authors conducted a national survey of physician groups, with a response rate of 48.3%. Multilevel linear regression was applied to 134 groups, collectively consisting of 1,245 physicians in Taiwan. The outcome variables were two manager-rated scores for group performance on achieving (a) comprehensive, coordinated, continuous care, and (b) patient health improvement. The results indicate that providing each physician feedback on peer performance is superior to not providing it; when providing peer information within a group, concealing identities is superior to revealing them. These findings imply that application of the principle of social comparison can be effective; however, caution should be taken when disclosure of identifiable peer performance may intensify peer competition and undermine care coordination in team-based models. Further, groups that distribute payments equally among physicians perform better than groups that distributed payment proportionally to physicians’ patient shares. The findings are germane to small teams, where physicians do not have full control over care processes and outcomes, and need to work cooperatively to maximize group-based payment.     

Incentives for health

This article discusses incentives to help make healthy choices the easy choices for individuals, operating at the levels of the individual, producers and service providers, and governments. Whereas paying individuals directly to be healthier seems to have a limited effect, offering financial incentives through health insurance improves health. Changing the environment to make healthier choices more accessible acts as an incentive to improve health. Employers can provide incentives to improve the health of their employees. Producers and service providers can take voluntary action to make their products less harmful, and they can be nudged into marketing healthier products within a regulatory environment. International agreements and monitoring systems can incentivize governments to do more for health. Lessons from climate change adaptation suggest that multilevel governance and policy integration are greater obstacles to policy change and implementation than knowing what has to be done. Policy change and implementation are triggered by many drivers, many of which are side effects of other policy pressures rather than of the direct policy goal itself. Effective action to reduce noncommunicable diseases will require leveraging social networks into a new ways of thinking about health; making better health prestigious and aspirational, and giving health and wellness a brand that encourages positive behavior change.     

Incentives and intrinsic motivation in healthcare

ObjectiveIt has been established in the literature that workers within public organisations are intrinsically motivated. This paper is an empirical study of the healthcare sector using methods of qualitative analysis research, which aims to answer the following hypotheses: 1) doctors are intrinsically motivated; 2) economic incentives and control policies may undermine doctors’ intrinsic motivation; and 3) well-designed incentives may encourage doctors’ intrinsic motivation.MethodWe conducted semi-structured interviews à-la-Bewley with 16 doctors from Navarre's Healthcare Service (Servicio Navarro de Salud-Osasunbidea), Spain. The questions were based on current theories of intrinsic motivation and incentives to test the hypotheses. Interviewees were allowed to respond openly without time constraints. Relevant information was selected, quantified and analysed by using the qualitative concepts of saturation and codification.ResultsThe results seem to confirm the hypotheses. Evidence supporting hypotheses 1 and 2 was gathered from all interviewees, as well as indications of the validity of hypothesis 3 based on interviewees’ proposals of incentives.ConclusionsThe conclusions could act as a guide to support the optimal design of incentive policies and schemes within health organisations when healthcare professionals are intrinsically motivated.     

Philanthropy and hospital financing.

OBJECTIVE. This study explores the relationships among donations to not-for-profit hospitals, the returns provided by these hospitals, and fund-raising efforts. It tests a model of hospital behavior and addresses an earlier debate regarding the supply price of donations. DATA SOURCES. The main data source is the California Office of Statewide Health Planning data tapes of hospital financial disclosure reports for fiscal years 1980/1981 through 1986/1987. Complete data were available for 160 hospitals. STUDY DESIGN. Three structural equations (donations, returns, and fund-raising) are estimated as a system using a fixed-effects, pooled cross-section, time-series least squares regression. PRINCIPAL FINDINGS. Estimation results reveal the expected positive relation between donations and returns. The reverse relation between returns and donations is insignificant. The estimated effect of fund-raising on donations is insignificantly different from zero, and the effect of donations on fund-raising is negative. Fund-raising and returns are negatively associated with one another. CONCLUSION. The empirical results presented here suggest a positive donations-returns relations and are consistent with a positive supply price for donations. Hospitals appear to view a trade-off between providing returns and soliciting donations, but donors do not respond equally to these two activities. Attempts to increase free cash flow through expansion of community returns or fund-raising activity, at least in the short run, are not likely to be highly successful financing strategies for many hospitals.