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PubMed1998

Designing an incentive compensation program that works.

To encourage innovation and improve departmental and organizational bottom lines, Winchester Hospital, Winchester, Massachusetts, developed and implemented a middle management and staff incentive compensation plan. Middle managers and staff who participate in projects that provide savings to the hospital are paid a share of the savings. The plan allows staff the option of designing "horizontal" projects, in which a project leader carries out a project individually or with peers, or "vertical" projects, in which a project leader directs a team of key individuals. Increasing numbers of vertical projects have been proposed since the plan's inception in 1994. In addition to increasing the hospital's operating income, the program provides cost-effective, variable compensation, which especially appeals to motivated, high-performing employees; motivates employees to overcome roadblocks; facilitates a team approach that bridges traditional departmental boundaries; and encourages a beneficial and collegial competitiveness among managers.

Cost Savings↗
PubMed1998

Regulating the financial incentives facing physicians in managed care plans.

Recent accounts of enrolees in managed care plans being denied access to potentially lifesaving services have heightened public anxiety about the impact of managed care on the accessibility and appropriateness of care, and this anxiety has been translated into legislative action. The present review focuses on an area of managed care operations that has received considerable attention in state legistlatures and in Congress during the past 2 years: the financial relationship between managed care health plans and physicians. Twelve states now mandate that managed care plans disclose information about their financial relationship with physicians, and 11 states regulate the method used by managed care health plans to compensate physicians. Most laws that regulate methods of compensation prohibit health plans from providing physicians an inducement to reduce or limit the delivery of "medically necessary" services. Moreover, in 1996 the Health Care Financing Administration finalized its regulations governing the financial incentives facing physicians in plans that treat Medicaid or Medicare patients, and these regulations went into effect on January 1, 1997. These regulations also are examined in this study.

Data Collection↗
PubMed1996

Medicare and Medicaid programs; requirements for physician incentive plans in prepaid health care organizations--HCFA. Final rule correction; notice of changes in compliance dates, with comment period.

In the March 27, 1996, issue of the Federal Register, we published, at 61 FR 13430, a final rule with comment period that implements requirements in sections 4204(a) and 4731 of the Omnibus Budget Reconciliation Act of 1990 that concern physician incentive plans. In the preamble of that rule, we set forth dates by which prepaid health plans had to comply with certain of the rule's provisions. This document clarifies and changes some of those deadlines, and provides an opportunity for public comments on them. It does not otherwise change the requirements set forth in the rule. In addition this document corrects the March 27 rule's inadvertent reversal of the nomenclature change made by a previous final rule.

Centers for Medicare and Medicaid Services, U.S.↗
PubMed1987

Incentive compensation creates questions of inurement.

Changes in the healthcare industry are causing changes in the healthcare executive. This new type of executive faces new risks, manages products instead of processes, and shows creativity on the job. To recruit, retain, and reward such an executive requires the use of a properly structured incentive compensation program. However, this program must be well developed and researched to preserve the tax-exempt status of the hospital and eliminate any possibilities of inurement.

Economics, Hospital↗
PubMedDate not supplied

A compensation incentive plan for hospital-based physicians.

The medical environment in which we currently practice is, at once, both frightening and exciting, full of opportunity for those who can best adapt. The number of practicing physicians is increasing at a rate greater than that of the population, while physicians' incomes are stabilizing, with actual buying power reduced. With more medical groups forming (more HMOs, IPAs, and PPOs), physicians are increasingly accepting salaried positions. Physician productivity will be one of the key factors in professional and economic survival. Increasingly, physicians, especially those who are hospital-based, have both revenue- and nonrevenue-generating responsibilities, including clinical, educational, research, and administrative activities. This article proposes a compensation incentive plan for hospital-based physicians that addresses these varied responsibilities.

Efficiency↗
PubMed1999

Penalties, incentives and wellness programs after HIPAA.

In the aftermath of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), employers need to carefully examine their wellness programs and in particular the incentives or penalties they have installed to encourage employees to adopt healthy lifestyles. Employers should look at the reasons they offer discounts, exclusions and wellness programs and assess how effective these measures are. They may want to replace them with "positive" approaches such as health fairs and education programs.

Employee Incentive Plans↗
PubMed1999

PHOs and risk: aligning incentives with internal subcapitation.

Many PHOs have not realized the efficiencies they anticipated when they accepted capitation payments on behalf of their member organizations. Internal subcapitation of professional and facility expenses can promote the organizational alignment of incentives necessary for PHOs to succeed in competitive managed care markets. PHOs may establish subcapitation budgets and corresponding leakage pools to augment efficiency and promote patient access within the PHO. Care should be taken, however, that sufficient resources needed to collect and analyze utilization data, as well as the infrastructure needed to administer subcapitation, are in place.

Budgets↗
PubMed1999

Reverse caps in Medicare encourage primary care, better align incentives.

If your medical group is seeing specialty costs spiral out of control in Medicare, a reverse capitation arrangement may help. Paying primary care providers fee-for-service--and specialty providers capitation--may better align your group's incentives and promote better use of low-cost primary care services for seniors. See if the methodology is right for you.

Aged↗
PubMed1999

Model for PCP contracts offers right incentives for Medicare, Medicaid providers.

Consider this model for PCP contracting. Provider organizations in Medicare and Medicaid often structure arrangements with their primary care providers that set up the organizations--and the doctors--to fail. An actuary from Milliman & Robertson in Seattle illustrates how to establish the right kinds of incentives for PCPs.

Aged↗
PubMed2000

How will PPS realign financial incentives and care? An indepth panel discussion by NAHC experts. National Association for Home Care.

The new prospective payment system (PPS) that will take effect for Medicare-participating agencies on October 1, 2000 will create a dramatic change in the culture of home care that has existed since the inception of the home care benefit in 1965. Will these changes be for the better or for the worse? Who will be the winners, and who will be the losers? How will these incentives change the behavior of home care agencies and the caregivers they employ in their efforts to provide health care to the infirm and disabled?

Aged↗
PubMed2001

Fiduciaries--HMOs--incentives to ration care. Pegram v. Herdrich.

Pegram v. Herdrich, ___ U.S. ___, 120 S. Ct. 2143 (June 12, 2000): An HMO cannot be liable for breach of fiduciary duty because of mixed eligibility decisions by its doctors, even if the HMO gives the doctors financial incentives to minimize care because treatment decisions made by an HMO through its physician employees are not fiduciary acts within the meaning of ERISA. Where eligibility for benefits depends upon decisions by doctors concerning their conclusions about when to use diagnostic tests, when to authorize consultations or make referrals, proper standards of care, whether a proposed treatment is experimental, the reasonableness of certain treatment, and the emergency nature of a condition, such "mixed eligibility decisions" are not fiduciary acts under ERISA, and an HMO will not be treated as a fiduciary to the extent it makes such decisions through its doctors.

Eligibility Determination↗
PubMed2001

Financial valuation of incentive arrangements in managed care contracts: a real options approach.

Managed care provider contracts with risk-based compensation arrangements are similar to derivative securities in that the value of a contract depends on the value of a more fundamental asset: the health plan's investment in the provider's member panel. As such, the financial value of the incentive to avoid investing in the health of the member panel can be modeled using financial engineering techniques.

Contract Services↗