$20B in incentives go to waste each year, says study
Not much according to Healthcare IT News in an article by Stephanie Bouchard, Contributing Editor.
“As the healthcare industry continues to move in the direction of using compensation incentives, a new analysis reveals that incentives as currently used are not an effective motivator for healthcare professionals and waste an estimated $20 billion in resources. “
More than 75 percent of healthcare incentives are so small or poorly publicized that providers aren't even aware of them, according to a new study that suggests more than $20 billion in incentives may be wasted annually.
Health Care Providers and Incentives: What Works—and What Doesn’t
“While healthcare employers are offering their doctors and nurses compensation incentives, many of those health professionals were not aware of the rewards being offered or were not able to distinguish incentive pay from base pay, ZS Associates’ researchers found. One-third of respondents who did know about the incentives did not find them motivating.
The report makes four suggestions for improving incentive efforts:
- Increase the “at risk” component. Increase the amount of money that is truly at risk. If goals are not achieved, that will be reflected in the paycheck. That “at risk” amount needs to be greater than it commonly is currently, said Bernewitz, to get people’s attention.
- Sustain the signal. Instead of an annual summary of incentive payouts, provide regular summaries to increase awareness.
- Get the metrics right. Some incentive programs are so focused on metrics that the effect is to dilute the incentives, so employers should focus on a few critical outcomes and tie incentives to those, said Bernewitz.
- Communicate. Provide clear and frequent updates so employees can keep track of their goals and how they’re doing in achieving those through the year. Also give employees a chance to be a part of the incentive program design process.”
(author)As long as the metrics for incentives are correct and credible, physicians can buy into the new model for reimbursement. A key factor is reporting more than once a year, and perhaps quarterly. The effects of change will not be apparent immediately.