Financial incentives for ambulatory care performance improvement

Area of Science:

• Healthcare Management
• Quality Improvement
• Ambulatory Care

Background:

• Capitated care necessitates balancing quality improvement with cost containment.
• Shifting patient care to outpatient settings requires a focus on ambulatory process improvement.
• The Stanford University Medical Center implemented a financial incentive program to drive these efforts.

Purpose of the Study:

• To evaluate the effectiveness of financial incentives in promoting quality improvement and cost containment in ambulatory care for capitated patients.
• To identify factors influencing the success of quality improvement initiatives within a financial incentive framework.

Main Methods:

• A financial incentive program was established, involving budget adjustments and reserve fund returns contingent on quality improvement project completion and cost containment.
• Implementation included clinical leader endorsement, physician education, data utilization for project identification and measurement, standardized templates, and dedicated quality managers.
• Departments were incentivized through budget reserves and potential bonus funds.

Main Results:

• Nineteen ambulatory quality improvement projects were developed and implemented by 8 out of 13 clinical departments.
• Program success correlated with the financial impact of incentives and the lead person's influence.
• Cost containment goals were met by only 5 departments.

Conclusions:

• Financial incentives can motivate physicians towards clinical process improvement.
• Strong clinical leadership and achievable initial projects are key to successful implementation.
• Capitated patient populations offer a promising focus for initial quality improvement endeavors.