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Don’t depend on financial carrots in healthcare

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Thomas Dahlborg, writing in Hospital Impact, warns about what he sees as the problems in depending on financial incentives in healthcare.

…{A}s we continue to move from productivity-based reimbursement to quality-based reimbursement via the Accountable Care Organization and other payment reform models, a large caution sign is illuminated before me.

“And of course this led me to the Harvard Business Review and “Why Incentive Plans Cannot Work”.

“Rewards do not create a lasting commitment. They merely, and temporarily, change what we do.

“People are likely to become less interested in their work, requiring extrinsic incentives before expending effort.”

“In addition, it’s very important to me as a patient, as a family member of patients and as a healthcare leader to know that those who are caring for those I love are doing so because they truly care–and not because they are being financially incentivized to do so. ”

“Yes, perhaps the financial incentives will change behavior (temporarily), and perhaps it will even have an impact on HCAHPS and other satisfaction and experience scores. But even if those scores were not affected only temporarily, do you really want a healthcare system to be driven by financial rewards rather than an enduring commitment to quality and safety by people who truly care?”



Financial incentives may temporarily change outcomes, but they do not change hearts.

  • Let’s not edge the humanity out of healthcare via over reliance on financial drivers of change.
  • Let’s focus on changing adaptively rather than with a quick financially based technical fix.
  • Let’s focus on bringing humanity back into healthcare once again.
  • Let’s eliminate existing barriers to true caring.


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