Incentives are Against the Law
First the good news: if physicians receive cash rewards for reducing overall hospital costs, they reduce overall hospital costs. Amazing.
Now, the bad news: except for a handful of cases – receiving special dispensation from the federal government – this practice is illegal everywhere else. (Meaning, you-could-go-to-jail illegal.)
All due to the Stark Amendment – which inhibits many types of beneficial collaboration between doctors and hospitals. How could the health care system survive without government protection from evil of all evils: the profit motive?
Pay for performance model combined with a pps reimbursment model.