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Doctor Pay for Performance: Benefit or Whack-a-Mole Solution?

By Stewart Gandolf, Chief Executive Officer

Healthcare is not short of controversy these days. Transformational change is disrupting every corner of the industry. One of the questions facing many physicians is how did I get here?

Remembering back to medical school, we were passionate, committed, empathic individuals choosing to serve a higher calling.

We took out loans to pay for medical school. We accepted training programs that offered overwork and little sleep so we would earn the privilege of taking care of patients. Now, many of us find ourselves in an industry where the feeling is that the system is rigged against us.


The clinical setting offers schedules that are double-booked, a limited time allotted for each patient, and then charting at night. In addition, free time is used to do required training on ICD-10, board exams, maintenance of certification, and other administrative requirements from our health systems, specialty boards, and from the government.

Half of doctors report burn out, which is defined as loss of enthusiasm for work, cynicism and a low sense of personal accomplishment. The triple aim advocates for the implementation of population health, reduction of cost, and enhancement of the patient experience.

The recently defined quadruple aim notes that achieving the triple aim is impossible without first mitigating the crisis of health professional burn out.

Is doctor pay for performance a useful incentive or half-a-loaf solution?

Now that health systems are responding to financial penalties that come with low patient satisfaction scores, those financial incentives are being passed on to individual physicians.

Pay for performance has been implemented with other targets in health care in the past such as quality, patient access and patient volumes. Pay for performance models can get results, especially in the short term.

It works until the next health industry initiative comes along and incentives are used to move a metric in a new area. This whack-a-mole approach can get results, but does it get to the root issue?

We need to address why patients are reporting a lack of empathy as part of their patient experience in hospitals. We know some of the key reasons for the suboptimal results in patient satisfaction:

  1. Poor communication with doctors and nurses
  2. Lack of care coordination
  3. Lack of the medical team working together
  4. Lack of patient understanding of discharge instructions
  5. Suboptimal pain control

The fact is the system is not working for patients or for doctors. A drastic redesign is needed. And the redesign should not be reinvented 5,000 times across individual hospital silos.

Now is the time for health systems to think long term about redesign strategies that offer quality and service to patients. The hospital ecosystem needs to create a restorative environment for health care professionals where the joy can return back into practice.

Also, watch for more technology and innovation to be injected into the industry, as investors turn more to disrupting the current state in health care.

Pay for performance for improved patient experience can deliver results, especially when paired with other initiatives like transparency and data analytics. However, attention should be put on redesigning the whole ecosystem that fosters empathy organically, rather than forcing compliance.

I’d like to hear your point of view. Doctors, healthcare professionals and patients are welcome to offer your ideas and comments below. What solution would you like to see?

Paul Rosen, MD

READ MORE: Dr. Rosen is a thought-leader and regular contributor. His previous articles include: Defining Personal Passion: A Physician’s Brand Expression, and What Would Empathy-Based Healthcare Look Like?

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