Carrots or Sticks?

January 30th, 2010 by Nick Jacobs Leave a reply »

When you do the math, you can rather quickly determine that, as the aging process continues with the Boomer generation, federal funding for health care and Social Security will become more and more scarce. At the same time, we have all read the sobering national statistics regarding unnecessary deaths from hospital missteps. The CMS (Center for Medicare and Medicaid Services) previously introduced a form of pay for performance, or –more accurately– no pay for performance, which has already caused a great deal of change in the American Healthcare System.

As is widely known by now, CMS has decided to literally stop paying for the treatment costs of preventable medical complications.  This actually may seem like an intelligent idea. This approach is referred to by some as visibility for good care, and there is no doubt that it will represent the beginning of a stampede from the third-party insurance payers to follow the CMS “Big Dog.”  In fact, several companies have already announced that they will not be reimbursing hospitals for similar errors, as well.  The truth of the matter, however, is that this step does not even begin to address the problem.

The problem is not about penalizing hospitals, it’s about creating an incentive system that is not disease and sickness based.  Until the pyramid is flipped, we will not see the necessary changes to halt this financial slide to economic oblivion.

Sanjay Saint, MD, MPH

About 9% of U.S. hospitals presently use daily reminders to help physicians remember which patients have urinary catheters in place.  According to the University of Michigan’s Sanjay Saint, a professor of internal medicine, about 74% of hospitals don’t keep tabs on how long the catheters are in place.  But the real issue is that about 98% of hospitals and physicians don’t completely address issues of wellness and prevention that can allow us to remain well until we die because there is little or no incentive to do so.

Logic would dictate that because financial reimbursements will be connected to these hospital-created mistakes, infections or injuries, someone will surely pay more attention to the current misses.  But what if the entire system was based on keeping people healthy?  What if all of our focus was on exercise, appropriate food consumption, and stress management?

Unfortunately – or fortunately, depending upon your perspective – the United States has become the most proficient country in the world when it comes to capitalism, and much of capitalism is based on manipulating people to get them to consume what will bring the financial success and rewards to the corporations.  If you doubt this, just go to Eastern Europe to see what is happening in an environment with unregulated tobacco advertising.  The circle has started all over again.

In the old carrot-and-stick arrangement, there will be plenty of hits.  Wouldn’t it have been interesting, though, to reward hospitals where mistakes are almost nonexistent so that the less successful medical centers might line up to learn from them, or to reward docs and hospitals for helping to keep people healthy all the time. Carrots work, too, and with much less grief.

Carrots and (Celery) Sticks

What’s the old line?  “We’re going to beat the troops until morale improves.”



  1. Mike says:

    Perhaps those of us in health care are going about looking at this huge complex health care issue the wrong way. Everybody keeps harping about incentives to improve care, cutting reimbursements to providers and facilities. So far it seems that nothing has really helped.

    Most providers I would say feel that they are over worked and don’t get enough time to spend with patients so nothing really gets resolved. That may be more true in the office setting than in the hospital but hospital providers MD and RN don’t have any cake jobs either. Neither do administrators for that matter.

    More concerning though from what I see is a growing lack of motivation to help people. Many providers again MD and RN that I see and have seen in many different facilities complain when patients come in with relatively minor injuries and illnesses. This is especially true when it is busy. I see patient’s pain not well treated and sometimes even ignored.

    It seems to me that a growing problem with health care is that the qaulity of care is being ignored and productivity is taking first chair. We shouldn’t need incentives to get people and hospitals to do what they should be doing in the first place. We need more providers in the system that are actually interested in caring for patients. But to do that it takes time and resources. With the population aging as well as the health care work force we will need of us providers to provide more care which will drive up costs. In the end I think we all want better care. In our attempts to curb costs we may be imeding better care.

    Perhaps we need to look at how we are allocating finite resources. For instance, are we adding any value by putting a pacemaker in a 95 year old that lives in a nursiing home that has dementia? No I don’t think so, so why do we spend money on patients like this? What value is added? Just because health care can do something doesn’t mean it should.

  2. Nick Jacobs says:

    Let me begin by thanking you, Mike, for your thoughtful words. My journey from teaching to my last twenty plus years in healthcare administration has certainly been a very different and eye opening journey that has resulted in my always distinctive observations regarding that world and why things in it are the way they are?

    In a few weeks I will be in Washington D.C. for a series of meetings regarding the sharing of information garnered from a comprehensive breast cancer research program that we co-founded back in 2000 (The Clinical Breast Care Program).

    We are also meeting with various leaders about a phenomenal group of neuroscientists who have successfully brought 43 people out of what had been determined to be persistent and irreversible vegetative states by combining a number of already approved modalities in a sort of neuro, but that is NOT what this response is about.

    My knowledge of the work being done by people like Drs. Wayne Jonas of the Samuelli Institute and Dean Ornish of the Preventative Medicine Research Institute as well as my board position on the American Board of Holistic Integrative Medicine have allowed me to see not only the potential future of medicine but also the future of healing in our country. During my tenure at the Windber Research Institute, our scientists worked extensively in Europe and Asia on programs that were directed toward wellness, prevention, and early detection of disease. These programs have combined to form my vision of how managed care through patient advocacy can actually work for this country.

    Recently we began partnership discussions with a group of facilitators who have successfully reduced insurance premiums in the businesses with whom they are working by as much as 30%. With a model program directed toward the principles of wellness that is coupled with an incentive program that rewards those responsible for encouraging these efforts, our health care dollars can finally begin to make sense.

    What a great time to start a world changing program.



    F. Nicholas Jacobs FACHE
    International Director
    SunStone Consulting, LLC

  3. Justin says:

    Insightful post. Thank you. Not to be completely cynical, but it almost seems as if they want the system to fail to justify greater control of it down the road.

  4. Nick Jacobs says:

    Thanks, Justin, re: THEY . . . one would have to ask WHICH THEY? I’m thinking that the way things are going 2.2 trillion for healthcare that produces a lower lifespan than most European and many Asian industrialized nations? It is BIG business, Justin, very big business no matter who is paying for it, and truthfully, all we have to do is stay on our lousy diets and continue our lack of exercise to keep this madness going.

  5. Goutham says:

    Nick- great post and interesting comments from Mike and Justin. There should be a better structure for providing incentives geared towards prevention but feel this doesn’t have to just apply at the hospital/ physician level. Each individual also needs to take responsibility and be rewarded when they make healthy lifestyle decisions.

    That’s why it’s great to see companies such as Virgin Healthmiles and Switch2Health (full disclosure, I work at Switch2Health) use the carrot system to motivate and reward users for physical activity. I hope this helps change behavior and has a better impact than punishing patients by not paying for treatment.

  6. Nick Jacobs says:

    I agree with Virgin Healthmiles and Switch3 Health concepts. Actually, however, they (CMS) is not punishing patients by not paying for treatment, they are punishing hospitals. Having said that, remember that $2 Q TIPS don’t cost two dollars, they are billed at that level to help cover the lost costs of treating the 47 million uninsured. We need to fix the incentives so that they encourage docs, hospitals, and patients to live healthy lives. Problem in the USA is that we are masters at Capitalism, and Capitalism sells more if there are French Fries and triple somethings involved. We desparately need health and SCIENCE reform, but it’s not going to happen if the rest of the votes “just say no,” for political reasons. We need a package that both parties will agree to, and that seems more out of reach than ever because agreement means that the current legislators might get re-elected.

  7. Fruits are very much required fro maintaining a better health…so naming some fruit and veggies isn’t bad at all…

  8. These are so inspiring! I think I will have to make that tart… hazlenut and chocolate is an unbeatable combo, that is certainly for certain. Adore your seasonal collage! : ) Have got a great weekend!

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