Focus on how to improve pay-for-performance by improving performance measurement
ID: 355614 • Letter: F
Question
Focus on how to improve pay-for-performance by improving performance measurement, as well as by improving design of our reward systems. Thinking about these issues, address two of the following topics:
Measures of performance are always affected by outside factors (contamination) and/or only measure part of the employee’s performance (deficient). All too often we end up choosing a measure of performance that is not going to measure what we really want or need to measure, but measure something else that is convenient. Discuss a concrete example of a performance measure and how it might be contaminated or deficient.
As discussed in Kerr’s “Folly” article, various systems reward behaviors that we didn’t really want. Think about an example of a performance measure or reward system that led to the wrong behaviors being rewarded. Don’t just use one of Kerr’s examples—but you can critique Kerr’s examples as well.
What is right and/or wrong with those merit pay grids, in terms of motivating employees to higher performance while balancing affordability of the system?
Write complete sentences not bullets. No plargrism
Explanation / Answer
Since the proposal from Medicare to test and invest in pay-for-performance (P4P) programs building on the groundswell of private-sector initiatives, there has been an explosion of interest in and debate on the merits and methods of P4P. The P4P expectations span the continuum from being the answer to the current woes of the health care system to outright skepticism and cynicism about another flawed attempt for a quick fix that avoids the need for fundamental change and true reform.
Is P4P the future, or will it fade and eventually pass into the graveyard of past failed health care reform efforts? As often happens, truth probably lies somewhere in between. In this article, we offer some ideas for reflection as part of the debate. Our goal is not to praise or condemn. Rather, we hope to temper expectations while offering some important considerations that will maximize P4P's potential for success and identify some principles for considering where P4P can have the most constructive impact on health. Even though P4P will undoubtedly influence the cost of care, it is unrealistic to expect that we can depend only on incentives to systematically improve quality and, at the same time, reduce costs.