The strict focus on carrots and sticks in the design of physician incentives may contribute to unintended results. Have a look at NEJM and you'll find an outstanding article that puts the stuff in the right place:
Using incentives both effectively and ethically requires a shift away from a simple, one-lever model that relies on tradition, self-interest, or emotional responses to reward participants for a desired action (or punish them with financial loss or shame for an undesired one). Such an approach risks alienating physicians and other personnel. Rather, the challenge is to cultivate consensus on an organization’s shared purpose and put that orientation into action through performance measurement and use of the other types of incentives.However, having said that, we know that the introduction of performance measures may be easier than to create a shared-purpose orientation on the organization (i.e. "an organizational commitment to the triple aim of improved patient outcomes, better population health and efficient costs"). Therefore, there is a need to guarantee "ethical conditions" under any pay-for-performance (P4P) scheme. Although I agree absolutely in this approach, the precondition is a consensus in the whole organization, from the top (board of directors) to the bottom (employees) and I'm uncertain about how to build and create such consensus in the current environment. Anyway, such uncertainty should not prevent efforts in this direction.
PS. On the HA blog you'll find the same topic and the same conclusion, by Dan Arieli and Stephie Woolhandler:
None can doubt health care’s grave quality deficits and cost excesses. As remedy, P4P suggests manipulating greed, a fuel that’s powered exponential growth in productivity in the overall economy. But Adam Smith, who first recognized greed’s awesome power, was also a moral philosopher who believed that commodity production required a parallel public service economy driven by social duty.
Sadly, greed has caused many of the worst abuses within the current system. Injecting different monetary incentives into health care can certainly change it, but not necessarily in the ways that policy makers would plan, much less hope for.
