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Providing Quality Incentives for Your Medical Staff?

Patient Safety Quality Monthly, January 27, 2006

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Dear Colleague,

How can I provide incentives to my medical staff for quality performance and not go to jail under the Stark amendment? That was the question a physician leader asked me a few months ago after a program on medical staff quality that I presented at his hospital outside of Chicago. He expressed his concern that, without some sort of incentives, getting physicians on board for quality initiatives may be difficult, particularly when those initiatives required change in their practice patterns or cost them time in how they managed their inpatient care. It just didn't seem fair to him that something couldn't be done to help motivate them with some kind of tangible incentive other then a hearty handshake and a pat on the back.

Well, the answer is a careful "Yes". There are some options that are legal and effective that hospitals have used successfully. Some hospitals have already used these principles successfully for meeting attendance. This month I will describe the guiding principles for this approach and next month, I'll discuss what you might want to use as incentives.

The most important principle is to establish eligibility pool criteria that are not volume based. That means to be eligible for a quality performance incentive, it can't be tied to the numbers of admissions for a given physician. For example, if the incentive is related to the use of evidence-based medicine, such as using standing order sets, the target should be based on the percentage of compliance, not the number of times the physician complied. Clearly one must have had at least an opportunity to use the order set to be eligible. A surgeon wouldn't be eligible for an incentive for pneumonia order set use. And an internist that did not admit any patients during the time period would not be eligible either. But if the internist admitted one pneumonia patient and used the order set, that physician would eligible.

The second principle is to make the incentive based on a random drawing from the eligibility pool. This means there is no guarantee of the incentive if the physician admits patients and meets the eligibility criteria.

The third principle is to have a reasonable frequency of the awards. Quarterly drawings seem to work well. This way, physicians will be more aware of the incentive and are more likely to be influenced by it on a daily basis.

The fourth principle is that having multiple smaller awards may be better than one big winner from each drawing. The awards can vary in size but probably shouldn't exceed more than $300 to $400 in value of any single award. It may also be better to make them tangible items or gift certificates rather than cash. This avoids potential legal issues of giving any one physician a large reward and also makes the incentive more real to more physicians. Either establish a fixed number of awards or some proportion of awards to the number of individuals eligible that will create a reasonable chance to get an award each drawing and a highly likely chance over many drawings. For example, having 25% winners at each drawing would mean that it is very likely someone would get an award in one year if they were eligible for four quarterly drawings.

Of course, before implementing these methods, check with your hospital legal counsel or your state hospital association to be sure that there aren't any local concerns. But hopefully, these principles will help you if you are thinking of motivating physician quality performance through incentives.

Regards,

Bob Marder, MD
Practice Director, Quality and Patient Safety
The Greeley Company

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