By Mark W. Friedberg, et al.
RAND, October 24, 2018
This report, sponsored by the American Medical Association (AMA), describes how alternative payment models (APMs) affect physicians, physicians’ practices, and hospital systems in the United States and also provides updated data to the original 2014 study. Payment models discussed are core payment (fee for service, capitation, episode-based and bundled), supplementary payment (shared savings, pay for performance, retainer-based), and combined payment (medical homes and accountable care organizations). The effects of changes since 2014 in the Affordable Care Act (ACA) and of new alternative payment models (APMs), such as the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) Quality Payment Program (QPP), are also examined.
Payment models are changing at an accelerating pace
Physician practices, health systems, and consultants find it difficult to keep up with the proliferation of new models, with some calling for a “time out” to allow them to better adapt to current APMs.
Payment models are increasing in complexity
Alternative payment models have become increasingly complex since 2014. Practices that have invested in understanding complex APMs have found opportunities to earn financial awards for their preexisting quality — without materially changing patient care.
Risk aversion is more prominent among physician practices
Risk aversion among physician practices was more prominent. Risk-averse practices sought to avoid downside risk or to off-load downside risk to partners (e.g., hospitals and device manufacturers) when possible.
For full document (96 pages):
RAND press release:
Science Confirms It: People Are Not Pets
Research on the efficacy of rewards tells us that we can’t bribe others into doing what we want.
By Alfie Kohn
The New York Times, October 27, 2018
The field of social psychology is sometimes accused of doing no more than ratifying common sense, so it’s worth paying attention when its findings are genuinely surprising. Case in point: the discovery that when we are rewarded for doing something, we tend to lose interest in whatever we had to do to get the reward.
This outcome has been confirmed scores of times with all sorts of rewards and tasks, and across cultures, ages and genders. Yet many teachers, parents and bosses persist in using versions of what has been called “sugarcoated control.”
Psychologists often distinguish between intrinsic motivation (wanting to do something for its own sake) and extrinsic motivation (for example, doing something in order to snag a goody). The first is the best predictor of high-quality achievement, and it can actually be undermined by the second. Moreover, when you promise people a reward, they often perform more poorly as a result.
Over the years, researchers have investigated some intriguing questions that stemmed from these basic findings. For instance: What if the reward is really large and luscious? (Answer: It’s apt to do even more damage to intrinsic motivation.) Are rewards destructive because they distract people from the task? (Apparently not, because other distractions don’t have the same negative effects.) Which is worse, giving people a set reward for doing something or making it contingent on how well they do it? (The latter, by a long shot.)
By now it should be clear that the trouble doesn’t lie with the type of reward, the schedule on which it’s presented, or any other detail of how it’s done. The problem is the outdated theory of motivation underlying the whole idea of treating people like pets — that is, saying: Do this, and you’ll get that.
The best that carrots — or sticks — can do is change people’s behavior temporarily. They can never create a lasting commitment to an action or a value, and often they have exactly the opposite effect … contrary to hypothesis.
By Don McCanne, M.D.
There is much more here than a casual glance might imply. The search for value-based payment in health care, as opposed to paying for volume, has led to various payment models such as shared savings, accountable care organizations, bundled payments, pay for performance (P4P), medical homes, and other alternative payment models. How well is that working?
To date, most studies have been quite disappointing. Claims of cost savings are belied when considering the additional provider costs of information technology and human manpower devoted to these models, not to mention the high emotional cost of burnout. This RAND study shows that these models are increasing in complexity, making it difficult for the health delivery system to keep up. Even worse, they are inducing risk aversion. The health care providers are trying to avoid those who most need health care – the opposite of what our health care system should be delivering.
Much of the experimentation in delivery models has been centered around reward or punishment. But, as Alfie Kohn writes, “intrinsic motivation (wanting to do something for its own sake)… is the best predictor of high-quality achievement,” whereas “extrinsic motivation (for example, doing something in order to snag a goody)” can actually undermine intrinsic motivation. It has been observed by others that the personal satisfaction of achievement of patient health care goals is tremendously rewarding, whereas the token rewards based on meager quality measurements are often insulting because of the implication that somehow token payments are a greater motivator than fulfilling Hippocratic traditions. Even more insulting are the token penalties for falling on the wrong side of the bell curve simply as a result of making efforts to care for patients with greater medical or sociological difficulties.
Quoting Alfie Kohn again, “carrots or sticks… can never create a lasting commitment to an action or a value, and often they have exactly the opposite effect … contrary to hypothesis.” The RAND report suggests slowing down and working with these models some more while increasing investment in data management and analysis with the goal of increasing success with alternative payment models. No. These models are making things worse. It’s time to abandon them and get back with taking care of our patients. The payment model we need is an improved version of Medicare that takes care of everyone. Throw out the sticks and carrots.
Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.