Incentivizing in Hospitals to Control Costs

October 29, 2011
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There’s a new sheriff in town. In the face of looming healthcare reform, healthcare organizations are searching for creative ways to control costs.

There’s a new sheriff in town. In the face of looming healthcare reform, healthcare organizations are searching for creative ways to control costs.  Not to be confused with the chief information officer, a growing breed of “chief incentive officers” are infusing the healthcare industry with a new-found emphasis on cost savings through better health management. The chief incentive officer examines ways to change behaviors toward a particular goal.  Applied to general health and wellness, incentives can work for both patients and caregivers in promoting better care management across all fronts.

Not only can the new CIO role incentivize a number of organization-wide initiatives for process improvement, but they also can also boost the health of both patients, employees and providers by encouraging them to engage in wellness activities such as taking their medications or maintaining a healthy diet.

 How do they do this? Through the art and science of incentives.  More specifically,

  •  Identify what type of behavior you’re trying to incent – clearly define the goal and why you are trying to reach that goal. In this case, it might be to improve the health of your medical staff in one specialty.
  •  Understand what will motivate your population and what won’t – according to IncentOne, to achieve a desired participation rate of 60 percent in wellness programs, it would take an incentive value of at least $356. For each increase of $100, researchers found that participation would increase by an additional 7 percent, with a maximum of 100 percent participation for an equivalent $900 incentive value.
  • Identify your preferred method of incentives – the incentive can take other forms besides pure cash, such as a gift card, food, personal services, or discounts. Often, cash or another financial equivalent may prove the most impactful.
  • Communicate – clearly communicate the goals and rewards to them. Remember to start early and to keep the rules simple so that the goal is achievable. Regular, systematic reminders about appointments, medications, episodic monitoring and other wellness activities will be key.
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