Throwing Money the Wrong Way

Paul Levy

First posted 9/21/11 on [Not] Running a Hospital

I have talked a bit about using financial incentives to encourage doctors to do a better, more efficient, and/or safer job in practicing medicine.  I have been skeptical of this approach because I do not believe that doctors find such measures to be highly motivational.  In my former hospital, we stayed away from financial incentives and even discussion of finances when we were instituting changes in work practices that improved quality and safety and the work environment.  Instead, issues were framed in terms of the underlying values of doctors.

I understand, though, why the government and insurers tend to lean towards financial incentives.  Payers, after all, deal in money.  Thus, they think they can use money to achieve their goals. When you have a hammer, everything looks like a nail.

The payers have been persuasive with legislators and the senior executives at both the federal and state level, notwithstanding insufficient data to support their policy prescriptions.  Later, as evidence emerges, the programs are proven not to work as expected.  The latest such analysis of which I am aware is a Perspectives piece by Gail Wilensky in the New England Journal of Medicine entitled, “Lessons from the Physician Group Practice Demonstration — A Sobering Reflection.”  Here’s the lede:

In early August, the Center for Medicare and Medicaid Services (CMS) announced the results of the Physician Group Practice (PGP) Demonstration project. Although the headline of the press release was glowing — “Physician Group Practice Demonstration Succeeds in Improving Quality and Reducing Costs” — the reported information suggests more mixed results. These results should dampen unreasonable expectations, particularly in terms of potential savings, for accountable care organizations (ACOs), which were modeled after the PGP demo.

I covered a different aspect of this topic in my recent article, “Never Events? Well, Hardly Ever,” in Virtual Mentor.  I discuss the persistent rate of wrong-site surgeries and argue that financial penalties for such “never events” are ineffective:

In the face of slow progress, there is little doubt why the regulatory hammer is employed. But it is a crude tool. Its effectiveness as a deterrent is minimal because it does not address the structural issues underlying the problem. It emphasizes a particular outcome rather than a process that will achieve it. It penalizes people when it is too late to make a difference. Finally, it serves mainly to create resentment among those who are targets for improvement. Such is often the nature of regulation, no matter how well intended.

Ori and Rom Brafman take us a down a different path to explain this kind of result in their book, Sway, The Irresistible Pull of Irrational Behavior (Broadway Books, 2008.)  They cite experiments and real-life situations in which “throwing money into the mix diminished altruistic motivation and introduced unexpected behavior.”  Apparently, our brains have two centers that influence behavior.  The posterior superior temporal sulcus, what they call the “altruism center,” is responsible for social interactions — how we perceive others, how we relate, and how we form bonds.  The other region is the nucleus accumbens, or “pleasure center,” where we react to financial compensation.  Now here’s the neat part:

Unlike, say, the parts of our brain that control movement and speech, the pleasure center and the altruism center cannot both function at the same time: either one or the other is in control.

Indeed, say the authors, offering a payment may undermine our altruistic motivations.

Doctors are the most well-intentioned people in the world.  They devote their lives to alleviating human suffering caused by disease.  We can count on their altruism in the patient care arena.  Admittedly, they are not always sufficiently trained in the science of process improvement, but a number of hospitals in the world have figured out that progress in that discipline comes from treating doctors with respect.  Framing the theories of process improvement by relating them to the underlying values and altruism of doctors is the way to go.  Throwing financial incentives into the mix, as noted by the Brafman’s, may be the quickest possible way to turn off the altruism switch and end up with unintended consequences.

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