Medical care research and review : MCRR
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Review
Penetrating the "black box": financial incentives for enhancing the quality of physician services.
This article addresses the impact of financial incentives on physician behavior, focusing on quality of care. Changing market conditions, evolving social forces, and continuing organizational evolution in health services have raised societal awareness and expectations concerning quality. This article proceeds in four parts. ⋯ Third, a simple net income maximization model of physician choices is presented, from which are derived formal hypotheses regarding the effect of financial incentives on physician choices of quality per unit of physician service and the quantity of services per patient. The model is extended qualitatively to offer further hypotheses and research directions. Finally, gaps and limitations of the model and of the extant empirical research are articulated, and additional researchable questions are posed.
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There is growing consensus that the U. S. health care system is not producing value relative to the resources invested. ⋯ Specific examples and questions for research are suggested with regard to the redesign of care systems, enhancing learning and transferring knowledge, and creating effective financial incentives. The specific measurement, analysis, and study design issues involved in under-taking such a research agenda are discussed.
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This article describes issues that should be considered in the development of a theory or theories about incentives from which testable hypotheses could be derived. Economic, psychological, and organizational theories are described, and issues that should be considered in hypothesis generation are presented. ⋯ Organizational factors influencing incentives include bundling of services or people, matching of incentive structure with work organization, and the incompletely contained hierarchical nesting of incentives. Finally, the dynamics of incentive change are considered, with a focus on describing the conditions under which physicians and physician organizations respond to incentive changes.