The Deadly Consequences Of Financial Incentives In Healthcare

For decades, elite business schools have touted the benefits of financial incentives to motivate sales teams, factory workers and rising executives. Results are mixed.

In medicine, financial incentives rarely achieve their intended goals. It’s not because they don’t work. As I tell students at the Stanford Graduate School of Business, it’s because they work too well.

Monetary rewards always change doctor behavior, but rarely achieve the outcomes desired—something my predecessor learned the hard way when he tried to increase patient satisfaction.

This article also provides alternative best practices for improving patient satisfaction that avoids many of the discussed pitfalls of financial incentives.  

Best Practices

• Transparency - Unblind the patient-satisfaction data for every physician and make the figures available for all to see. This allowed everyone to assess their own strengths and weaknesses.
• Education - We created educational programs to help physicians improve their satisfaction scores with personal coaching and development opportunities. 
• Convenient access to care - We made it easier for doctors to satisfy patients by offering convenient access to care through technology.

The full Forbes article can be viewed at this link.