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By Monica E. Oss

March 17, 2012

In my post last week, The Answer Is… all members, I wrote about both the cost of readmissions to our health care system (with 20% of Medicare patients discharged from a hospital readmitted within 30 days) and the financing realignments – ACOs, bundled payments, and health homes – that are developing to reduce that readmission rate.

I got a hearty confirmation of the need for the realignment of financing and compensation to address this issue from OPEN MINDS Circle reader Richard Maye. He wrote:

My experience is in aligning the goals of the hospitals that I work with the compensation of the clinical staff. In many cases the hospital can see clear evidence that the current method of compensation for clinical staff is not in alignment. When that happened in the cases that I was involved with, it was essential to make the reasons for the need of goal alignment clear to clinical staff. I presented the case by identifying the significant changes in reimbursement to hospitals and the associated penalties for not meeting established benchmarks. To do this, I use different models to fit different clinical specialties and financial situations.

One model is to incentivize clinical staff on both productivity and quality measures. In one case, after clinical staff achieved a minimum productivity threshold, their compensation was based 60% on productivity and remaining 40% for achieving 100% of certain “quality” measures (it was all or nothing). The term “quality” can apply to many measures – 90% for patient satisfaction scores each quarter; completing all chart documentation accurately on time, EHR, implementation, and other factors. Another model is to set minimum standards for clinical staff on key performance measures, such readmissions and other benchmarks, and provide the clinical staff with that data so they can see how their performance will affect their compensation (and in some cases their continued employment) on a real time basis.

To keep on top of the developments in alternate financing arrangements, check out these great reference documents in our industry library:

For an update on how to position and prepare your organization for these financing developments, join my colleague Daniel Y. Patterson, M.D. and me on April 14, 2012 for our Pre-conference University presentation, Beyond FFS: Like It Or Not, Performance-Based Reimbursement Is Your Future, at the 42nd National Council Mental Health & Addictions Conference.


Monica E. Oss
Chief Executive Officer, OPEN MINDS

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