Cash for clinics: When economic incentives may backfire

In a piece for the Behavioral Science & Policy Association, I write about new research that shows that economic incentives for hospitals in some cases may backfire. An excerpt:

As an example, the researchers point to the Hospital Value-Based Purchasing Program of the Centers for Medicare & Medicaid Services (CMS). The program makes Medicare payments to hospitals conditional on how well the institutions perform on quality measures, health outcomes, and patient experience. Manary and colleagues suspect that because this incentive-based system singles out winners and losers, the hospitals that do poorly by the metrics and thus receive less funding may end up performing even worse as their financial health deteriorates. So well-intentioned—and to some extent well-founded—as monetary rewards for good behavior may be, they could ultimately backfire if the context is unfitting.

Read the full text here.

Simon Hedlin

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