Good Incentive Programs are Hard to Design
A great New Yorker article on article on doctor compensation has an interview with Harris Berman who started with a small doctors group and grew it into the largest HMO in the Northeast. Here’s what Harris has to say about incentive programs:
Over the course of thirty years, Berman told me, he’d tried paying physicians almost every conceivable way. He’d paid low salaries and high salaries and still watched them go home at three in the afternoon. He’d paid fee-for-service and watched the paperwork accumulate and the doctors run up the bills to make more money. He’d come up with complicated bonus schemes for productivity and given doctors budgets to oversee. He’d given patients cash accounts to pay their doctors themselves. But no system was able to provide both simplicity and the right balance of thriftiness and reward for good patient care. (emphasis added)
Sounds right to me. It’s a difficult balancing act.
