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To Improve Patient Safety and Healthcare, What Works Better the Carrot or the Stick?

Two recent articles highlight the age old question – what works better, the carrot or the stick?

The carrot that has been offered is financial incentives for physician care that leads to better patient outcomes. However, unfortunately, the results have not seen a great improvement in patient care or reduced adverse events. Modern Healthcare reports:

Linking financial rewards to cost-effective management of patient care or reducing adverse outcomes has not produced the desired results, recent studies show. When it comes to physician pay, some experts are asking if healthcare organizations are moving in the wrong direction …

“The programs are often less effective than the designers hoped for,” said Jessica Greene, associate dean for research at George Washington University. She conducted two studies of an ambitious physician incentive program at Minnesota-based Fairview Health Services. “There is still so much we don’t know about how to design effective pay-for-performance programs.”

The stick is probably best exemplified by recent financial penalties to improve care by CMS. Fierce Health Financial says:

Forbes.com commentator Peter Ubel, M.D., noted that when the Medicare program first started penalizing hospitals for patient falls, injuries and pressure sores, it implemented such penalties all at once. The agency didn’t conduct trials at random individual hospitals in order to gather precise data on whether the penalities made a difference in outcomes. “So any change in hospital quality that has occurred since 2008 can’t necessarily be attributed to the program,” Ubel argued.

The costs for not reducing such incidents can be high. Hospitals in Florida, for example, face annual Medicare penalties of as much as $300 million for not curbing preventable infections. There are also concerns as to whether hospitals actually report such preventable issues at all. The Wall Street Journal recently reported that up to 40 percent of providers, including hospitals, may be docked up to 1.5 percent of their overall Medicare payments for not submitting required data.

So, what do you think?

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Or, perhaps the answer is more complex than this.

Perhaps the carrot needs improving, as the Modern Healthcare article discusses:

Behavioral economists and healthcare quality and management experts are urging provider organizations to take a second look at their payment models. Complex compensation designs, poor alignment of goals and lack of clearly defined, actionable measures can lead to failed efforts and unintended consequences, they say. Poorly aligned monetary motivations can even lead to difficulties with staff recruitment or retention and lead to over-focusing on one specific issue at the peril of other, more important ones.

Moreover, the stick has had some success, reports Fierce Health Financial, noting that there has been:

some dramatic improvements, such as in the sharp decline in the number of catheter-related urinary tract infections and venous central line infections. But there was no such downward trend for incidents such as injurious falls or pressure sores, although both actually dropped, according to the charts Ubel compiled.

Examples of how to improve healthcare outcomes and patient safety exist. For example, St. Joseph/Candler Hospitals in Savannah, GA has found that continuously electronically monitoring patients receiving opioids has made them “event free” – and they’ve been doing this for more than 10 years. In addition, although patient falls and pressure ulcers may not have benefitted from the carrot approach, El Camino Hospital in Mountainview, CA says that they have achieved zero reportable pressure ulcers; and Minnesota Masonic Home in Bloomington, MN reduced its average patient falls from seven in late 2008 to five falls per 1,000 resident days.

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