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Perverse Incentives in Healthcare Achieve Little


One hospital rewards surgeons who finalize operative reports with golf balls, thus discouraging its objective by providing incentives for a different behavior.

Not long ago, I was visiting with a young fellow, as in post-residency. He mentioned that his shag bag had been low on golf balls, but he was replenishing it at a pretty good clip. Knowing how broke he is and how expensive golf balls can be, I asked how he was managing that. The story turned out to be a good example of a misguided incentive.

One of the hospitals where the fellow operates is next door to his primary surgery facility and he operates there only several times a month. Given that the hospital's EHR is only accessible from within the facility, it is a nuisance for this young surgeon to finalize operative reports for the hospital and he is regularly close to the 30-day deadline for signing his reports. Apparently he is not alone, because the hospital has begun giving surgeons a sleeve of golf balls each time he or she comes in to finalize operative reports.

Let's look at the effectiveness of the incentive:

Does the target audience value golf balls?

I am not a surgeon, but I am also not a golfer. This incentive would leave me cold, as well as at least a little irritated that no one considered what I might like instead.

And what about surgeons not in training? How motivating is $15 worth of swag?

What do golf balls have to do with the desired behavior?

A sleeve of golf balls for signing reports is clearly a non sequitur relative to completing documentation.

How immediate is the reward?

One could argue that the reward is almost simultaneous with completion of the desired behavior. That's only true if the golf balls are the reward in and of themselves. In most cases, the real reward is a pleasant afternoon on the links, and that is completely separated from submitting reports.

What is the unintended consequence of the incentive?

My young friend does not batch his documentation management trips to the hospital. If he happens to be in the hospital on rounds or for another surgery, he will not complete the documentation if it means he will not get his golf balls. He will put off signing, and make another trip.

That's why this kind of motivator is often called a perverse incentive: The goal has become the golf balls instead of the work. The incentive actually discourages its objective by providing incentives for a different behavior.

What would be a better solution?

The ideal solution is to make it easy, almost painless, for the surgeon to complete the reports. The first step is to talk to the physicians and ask them what makes it so hard to do what needs to be done. The second is to negotiate a solution based upon the desires and constraints of both parties. The guiding principle is to make it as easy as possible for the surgeons to do what the hospital wants done.

The optimum solution may not be achievable within the hospital's budget or data security constraints. Even so, there are bound to be several sub-optimal alternatives that are a big improvement over the status quo. Maybe the golf ball hospital could put a single terminal in the larger hospital next door to allow physicians to complete the reports without making a trip to the smaller facility. Maybe it makes sense to take a step back from doing everything online: fax the reports to the physician's office, finalize the reports there, and fax the reports back to the hospital. It's not elegant, but it gets the job done.

If the focus is on the purpose of the task, i.e., getting the work done, meaningful improvements can always be made. If the focus is on getting a task done in a non-negotiable way, options are severely limited. Perverse incentives seem to be the only way to modify behavior, and unintended consequences result.

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