Paying 4 Performance

Steffie Woolhandler, Dan Ariely, and David Himmelstein have a real cool post on Paying 4 Performance (P4P) in healthcare, wherein docs are giving financial incentives to be better doctors. Medicare and private insurers are moving toward P4P pay structures for providers, but these behavioral economists argue that it’s an ineffective tool for improving care. “Quality breeches in medical care” are most often attributed to “fatigue; poorly designed workflow and care systems; undue commercial influence; knowledge gaps; memory lapses; reliance on inappropriate heuristics; poor interpersonal skills and insufficient teamwork, to name just a few. But ‘not trying’ is rarely cited. Yet P4P implicitly blames lack of motivation for poor quality care.” So that’s interesting. Yo, doc. You have too much to do, not enough help, you haven’t been trained on this procedure and you’ve been working for 16 hours but I’ll give you a thousand bucks to get this done right. jaskldfjakd nope.

There’s also some evidence that P4P makes people perform WORSE—because of the pressure: “Huge incentives offered to rural villagers in India—equivalent to about half of their annual money income—worsened performance on complex memory and puzzle-solving tasks. High stakes incentives may be distracting, interfering with cognitive focus and creativity.” MAKES SENSE 2 ME.


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