Newtown, CT – June 8, 2012
In the mid 1960s, Frederick Herzberg laid out an important theory: the factors that lead to job satisfaction are different than the factors leading to job dissatisfaction – his paper on motivating a workforce would become the most widely read paper in the Harvard Business Review…ever. Herzberg's insights are often forgotten today, at a time when they are most relevant, especially as we design and implement new payment models (i.e. financial incentives) for physicians and hospitals. The carrot and stick approach, what Herzberg refers very cynically in his paper as the KITA method (for kick in the ass), doesn't work very well. Instead, he suggests an exercise in minimization of toxic environmental factors. We've grown accustomed to thinking that incentives can be optimized, that behaviors can be finely tuned to respond to the incremental adjustment in fee schedules or bonuses. They can't. What we must do is actively minimize misalignment of incentives – factors that lead to job dissatisfaction. If I encourage employees to seek care while penalizing physicians for delivering too much care, then I'm creating a toxic environment leading to dissatisfaction. If I put physician income at risk but only tell them after the fact what their budget was and that they blew it, then I'm creating a toxic environment leading to dissatisfaction. If we want physicians to develop and maintain an internal motivating generator (as Herzberg refers to it), we have to minimize the factors that are stopping them from achieving their potential.
What this means to you – Physicians and hospitals want discretion on the resources to manage their patients, but payers want to control the use of resources as much as possible. Physicians want patients engaged in their health and following treatment recommendations, but most patients don't want to lose weight and exercise, or do anything else that doesn't have an immediate beneficial effect. The list goes on, and you get the point. Faced with these lists and understanding the inherent conflicts, most academics and pundits talk about "aligning incentives". And they can keep talking about it for a long time, to little or no effect. Because the goal shouldn't be to align incentives, but rather to systematically reduce the misalignments. It's not the same thing. Aligning incentives presumes there is a unique and ideal point of convergence where all interests can be aligned to achieve a common goal. Reducing misalignments means focusing on the pairs mentioned above, a pair at a time, and putting in place mechanisms that significantly decrease the conflict in interests. Importantly, we must start with providers and patients, making sure that what we're encouraging on one side is not discouraged on the other. However heretical this might sound, we need to stop interfering and making the pursuit of doing a good job a PITA (for pain in the ass) by focusing constantly on the KITA. That's partially why global capitation and bundled payments, have so much appeal to providers and payers – the docs get a budget and are left to their devices to manage it. And if they do a good job, they get financial benefits in addition to freedom to practice as they see fit. As for the payers, they get to stop the constant KITA, which, even for them, has mostly turned into a PITA.
Francois de Brantes
Health Care Incentives Improvement Institute, Inc.