Background

Health systems struggle to incentivize physicians to pursue organizational goals like reducing hospital admissions and emergency department use. The authors of this Commonwealth Fund–supported study describe how Advocate Health Care, a large integrated delivery system in Illinois, used a combination of individual and group-level incentives, as well as nonmonetary rewards and supports, to focus provider attention on care coordination and cost-effectiveness.

What the Study Found

  • Advocate’s incentive program relies on 150 measures to assess physician performance, including many traditional quality and outcomes measures. To measure value, it uses an efficiency index, which is calculated at the organizational level and is based on length of stay, hospital admissions, emergency department use, readmissions, and use of in-network resources, among other variables.
  • Because roughly 30 percent of the incentive payment is determined by organizational performance, providers are spurred to collaborate with one another to achieve shared goals.
  • While Advocate offers significant financial rewards—physicians can increase their pay by 10 percent to 50 percent—nonmonetary incentives, such as real-time feedback on performance, plaques, and invitations to serve as faculty, are also powerful motivators.

Conclusions

Using a combination of financial benefits, social pressure, and motivators like professional pride, Advocate engaged physicians, including many in private practice, in pursuing systemwide goals.