Developing an incentive system for PHO physicians

To succeed in a capitated market, a physician-hospital organization (PHO) must deliver high-quality health care in the most cost-effective manner possible. Integral to the provision of cost-effective care for patients covered by capitated contracts is the development of a sound physician incentive program. Such a system is essential to align the incentives of all the key players and enable them to share in the rewards and risks associated with capitation. Following specific guidelines for establishing physician incentive programs in a PHO can ensure the success of such programs.