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Related Experiment Videos

Gain sharing: a good concept getting a bad name?

Gail R Wilensky1, Nicholas Wolter, Michelle M Fischer

  • 1Project HOPE, Bethesda, Maryland, USA. gwilensky@projecthope.org

Health Affairs (Project Hope)
|December 7, 2006
PubMed
Summary
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Diagnosis-related groups (DRGs) created misaligned incentives between hospitals and physicians. Gain-sharing strategies evolved, facing regulatory hurdles, but broader approaches show promise for future healthcare payment reform.

Area of Science:

  • Healthcare economics
  • Health policy analysis
  • Physician-hospital financial alignment

Background:

  • Diagnosis-related groups (DRGs) altered financial incentives, creating a disconnect between hospital and physician interests.
  • Physician-led gain-sharing initiatives emerged in the 1990s seeking to capture savings, but faced regulatory challenges.
  • Past attempts at gain-sharing were curtailed by advisory bulletins from the Office of Inspector General.

Purpose of the Study:

  • To analyze the historical evolution of physician-hospital financial alignment strategies.
  • To evaluate the impact of regulatory actions on gain-sharing initiatives.
  • To identify promising future models for aligning healthcare provider incentives.

Main Methods:

  • Historical review of healthcare payment models and regulatory guidance.

Related Experiment Videos

  • Analysis of physician-hospital financial incentive structures.
  • Examination of evolving gain-sharing concepts and pilot programs.

    • Main Results:

    • The introduction of DRGs fundamentally misaligned hospital and physician financial incentives.
    • Regulatory scrutiny from the Office of Inspector General significantly limited early gain-sharing models.
    • Current considerations include narrowly defined gain-sharing and broader strategies in new CMS demonstrations.

    Conclusions:

    • Addressing the misalignment created by DRGs requires innovative financial strategies.
    • Regulatory frameworks significantly influence the feasibility and design of gain-sharing programs.
    • Broader, systematically tested gain-sharing models hold greater potential for future success.