Rewards and Punishments in Health Care: Are They Getting Us What We Want?

Do you remember that moment of joy when you were a kid and you finally finished a masterpiece—a funny clay creature or an “impressionistic” painting? When you’re young, something about creating art just feels good and right, not all that different from what it feels like to connect with patients and provide quality care, if you’re a doctor. What happens when we interfere with those motivations?

In 1973, Mark Lepper of Stanford University and colleagues at the University of Michigan wanted to answer this question. They gathered preschoolers who spent a fair amount of their free time drawing and divided them into three groups. Kids in the first group were told they would be given a neat certificate and a ribbon if they drew for six minutes. Kids in the second were asked to draw for six minutes and were given the same certificate and ribbon when done. Children in the last group were just asked to draw for six minutes.

Researchers then observed the children for a few days and tracked how much time they spent spontaneously drawing. Those children who were told they would receive a reward in the study spent only half as much time drawing as the kids in the other two groups. Even more revealing, all the art from the six minutes was assessed blindly—and the drawings done by the incentivized group were judged to be of lower quality.

In health care, there has been a strong push for value-based or quality-based or merit-based payment—rewarding or penalizing practices based on quality measures. The Centers for Medicare and Medicaid Services (CMS) and, increasingly, private insurers have been doubling down on this idea for years, despite research that says extrinsic rewards and punishments can kill our intrinsic motivation and reduce the quality of our work.

Interestingly, the new administration pulled back from the idea—Tom Price, Secretary of Health and Human Services (HHS) before he resigned, was not a fan. Maybe the leaders have been diving into the work of Alfie Kohn, an expert on reward psychology and the author of fourteen books on human behavior. I did when writing Back to Balance. I combined it with research into physician burnout and research by Dr. Lawrence P. Casalino of Weill Cornell Medical Center, using Medical Group Management Association data. He and his colleagues found that we spend roughly $15.4 billion just gathering, reporting, and analyzing quality measure data every year.

Here were my biggest takeaways.

Pay for performance was discarded by most industries back in the 1990s.

In the 1980s pay for performance—an external push—became a hot new way to get people to do more or do better. In the 1990s, though, carrot-stick thinking was found lacking. What study after study has found is that if you attach an outer reward to something that should be motivated on an inner level—like doing a good job—that motivation drops. Just like it did for the young artists in Lepper’s study. Over the long term, results suffer—especially creative thinking, problem solving, and quality.

If we believe that getting high-quality care from our doctors is just a process of rote task completion based on what payers say are the right things to do, then sure, pay for performance can work in medicine. If, however, we value quality in judgment and engaged doctors who really want to do what’s best for their patients, then it may not be the best choice.

Many of the measures rely on patient compliance—and that creates tension.

When it comes to lifestyle choices and healthy behaviors, doctors are advisors, not enforcers, nannies, or wardens. So the business model of paying providers as though they are leads to a direct conflict with patients’ exercise of free will.

Worse, quality measures that require patients to get a screening, take a medication regularly, or see a specialist (things they may not be able to afford) prompt the fundamental problem of “collective rewards”—even if the patient doesn’t know she’s on a team. Alfie Kohn describes the problem in his book Punished by Rewards: When a group pays the price for the behavior of one member, the rest of the members turn on that person.

Providers are expected to respond with empathy and understanding to patients who aren’t following medical advice. But when those providers and practices are the ones paying the price, financially, what do we think will happen to their compassion?

“Check box, get paid” can incentivize dumb medical moments.

 Imagine a fit, lean retiree goes to the doctor. He gets weighed and then examined for his shoulder problem. At the end of the visit, the doctor says, “We also need to discuss your weight.” The man is taken aback—his weight hasn’t changed.

“Why?” he asks.

“Your BMI is below normal for your age. I’d like you to work on gaining 7 pounds. Let’s set up a follow-up appointment for three months.”

The doctor then checks off the box that says she developed a follow-up plan for a Medicare patient over the age of 65 with a BMI below 23. And helps protect the practice from a financial penalty.

These moments interfere with doctors’ desire for autonomy and create distrust with patients, who then comply with medical advice even less. In the MGMA study, 73 percent of medical practices replied that the measures they track and report don’t even moderately represent the quality of care they’re providing. And they have to invest more than $40,000 a year per doctor just to comply.

Way back in 1993, Alfie Kohn wrote: “Many managers understand that coercion and fear destroy motivation and create defiance, defensiveness, and rage.” Are these the emotions we want doctors to feel as they walk into an exam room to treat a vulnerable patient?

I would never argue that we don’t need to improve quality or that quality standards don’t work in health care. They do—especially when they are tied to health care providers intrinsic motivations and good outcomes and paired with common sense advice. But we need to start having honest, balanced conversations about what’s not working and why.

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This article was adapted from Back to Balance: The Art, Science, and Business of Medicine.

?Halee Fischer-Wright, who received her M.D. from the University of Colorado, is a nationally recognized physician leader, health care executive, and former business consultant, whose work focuses on innovation and creating cultures of excellence. Dr. Fischer-Wright is president and CEO of Medical Group Management Association (MGMA) and is the coauthor of Tribal Leadership, a New York Times bestseller. You can learn more about Back to Balance and access free resources at DrHalee.com.