What if cost cutting measures were put into place, but no one listened?
That’s the question cardiologist Sandeep Jauhar asks in a recent, excellent, New York Times essay. In the piece, he writes about the problem of Medicare readmissions, a significant cost driver. One of the ways to decrease the frequency is to financially reward hospitals that have low re-admission rates.
There’s one problem, however. Doctors don’t see much of money tied to that performance measure.
And that’s important, since it’s the physicians themselves, not hospital executives, who make the decision to admit a patient, or not.
Despite calls for doctors to be altruistic and “do the right thing,” nothing changes physician behaviors more than money. As it stands, there’s zero financial incentive for doctors to reduce their readmission rates. In fact, most doctors lose money by doing so.
Dr. Jauhar suggests sharing the reward:
Current law prohibits hospitals from paying doctors for reducing hospital services, even if the goal is to provide more efficient care. But such “gainsharing” will align doctors’ incentives with broader cost-cutting goals. Our system needs to provide inducements to decrease the amount of health care, especially with the current incentives that encourage rampant overutilization.
Align the financial motives of both doctors and hospitals, and there’s no doubt that results will follow.