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The American Journal of Managed Care February 2013
Are Benefits From Diabetes Self-Management Education Sustained?
JoAnn Sperl-Hillen, MD; Sarah Beaton, PhD; Omar Fernandes, MPH; Ann Von Worley, RN, BSHS, CCRP; Gabriela Vazquez-Benitez, PhD, MSc; Ann Hanson, BS; Jodi Lavin-Tompkins, RN, CNP, CDE, BC-ADM; William Parsons, MS; Kenneth Adams, PhD; and C. Victor Spain, DVM, PhD
Impact of Oral Nutritional Supplementation on Hospital Outcomes
Tomas J. Philipson, PhD; Julia Thornton Snider, PhD; Darius N. Lakdawalla, PhD; Benoit Stryckman, MA; and Dana P. Goldman, PhD
Comparative Effectiveness Research and Formulary Placement: The Case of Diabetes
Michael E. Chernew, PhD; Rick McKellar, BS; Wade Aubry, MD; Roy Beck, MD, PhD; Joshua Benner, PharmD, ScD; Jan E. Berger, MD, MJ; A. Mark Fendrick, MD; Felicia Forma, BSc; Dana Goldman, PhD; Anne Peters, MD; Rebecca Killion, MA; Darius Lakdawalla, PhD; Douglas K. Owens, MD; and Joe Stahl, MA
Oral Nutritional Supplementation
Gordon L. Jensen, MD, PhD
Medical Homes Require More Than an EMR and Aligned Incentives
Samantha L. Solimeo, PhD, MPH; Michael Hein, MD, MS; Monica Paez, BA; Sarah Ono, PhD; Michelle Lampman, MA; and Greg L. Stewart, PhD
Do Electronic Medical Records Improve Diabetes Quality in Physician Practices?
Jeffrey S. McCullough, PhD; Jon Christianson, PhD; and Borwornsom Leerapan, MD, PhD
Short-Term Costs Associated With Primary Prophylactic G-CSF Use During Chemotherapy
Suja S. Rajan, MHA, MS, PhD; William R. Carpenter, MHA, PhD; Sally C. Stearns, PhD; and Gary H. Lyman, MD, MPH
The Cost of Implementing Inpatient Bar Code Medication Administration
Julie Ann Sakowski, PhD; and Alana Ketchel, MPP, MPH
Spending and Mortality in US Acute Care Hospitals
John A. Romley, PhD; Anupam B. Jena, MD, PhD; June F. O'Leary, PhD; and Dana P. Goldman, PhD
Cost-Effectiveness of Medicare Drug Plans in Schizophrenia and Bipolar Disorder
Kenneth J. Smith, MD, MS; Seo Hyon Baik, PhD; Charles F. Reynolds III, MD; Bruce L. Rollman, MD, MPH; and Yuting Zhang, PhD
Introducing Forensic Health Services Research
Laurence F. McMahon Jr, MD, MPH; and Vineet Chopra, MD, MSc
Currently Reading
Guidance for Structuring Team-Based Incentives in Healthcare
Daniel M. Blumenthal, MD, MBA; Zirui Song, PhD; Anupam B. Jena, MD, PhD; and Timothy G. Ferris, MD, MPH

Guidance for Structuring Team-Based Incentives in Healthcare

Daniel M. Blumenthal, MD, MBA; Zirui Song, PhD; Anupam B. Jena, MD, PhD; and Timothy G. Ferris, MD, MPH
Team-based performance incentives may improve healthcare team performance, but provider organizations face a number of structural, technical, and cultural barriers to adopting them.
New payment methods designed to incentivize more efficient care delivery are accelerating the movement of healthcare providers into organized provider groups. More efficient healthcare delivery requires explicit structuring of care delivery processes around teams of clinicians working toward common patient care goals. Provider organizations accepting new payment methods will need to design and implement compensation systems that provide incentives for team-based care. While lessons from studies performed both outside and inside healthcare provide some guidance on designing and implementing team-based incentives, organized delivery systems face several significant barriers to accomplishing this.

(Am J Manag Care. 2013;19(2):e64-e70)
  •  Future efforts to reduce healthcare spending and improve care quality will likely rely heavily on teamwork.

  • Research from within and outside of healthcare indicates that team-based performance incentives can improve team effectiveness. Thus, team incentives may help delivery organizations to improve quality and reduce spending.

  • Barriers to implementing team incentives include: frequent clinical team turnover; clinician resistance to changing practice patterns and reimbursements; and adoption of reliable and valid team performance measurement systems.

  •  Strategies for addressing these barriers include: improving clinical team continuity; involving clinicians in incentive design; and using information technology for work team monitoring and assessment.
As healthcare spending continues to grow, provider payment reform remains a priority for policy makers. Both public and private sector policies have focused on the payment system as a central tool for delivery system reform. Federal examples include Value Based Purchasing and the Shared Savings Program for Accountable Care Organizations.1,2 At the same time, the Center for Medicare & Medicaid Innovation (CMMI), commercial plans, and Medicaid programs are testing new delivery models and payment incentives.3

As provider organizations sign these contracts, they must grapple with how best to organize care processes and change the incentives within their own organizations.4-7 Provider organizations need to examine and modify existing compensation systems to better align provider incentives with the cost-containment goals created by the new payment methods and new care-delivery models they will put in place to achieve them. For example, new compensation systems are needed for distributing global or bundled payments, distributing shared savings, and encouraging teambased care across provider specialties.

It is widely understood that future efforts to improve patient outcomes and system efficiency are likely to rely heavily on increased teamwork.8 However, little attention has been given to how to best structure financial incentives within an entity such as an accountable care organization (ACO) to maximize cooperation in achieving improved quality and lower spending. While teamwork has been shown to improve clinical outcomes and provider satisfaction in a variety of ambulatory and inpatient settings, discussion of how best to incent medical teams has been limited.9-18 In this article, we focus on the design of reward systems and performance evaluations for teams.

We begin our analysis with a clinical vignette to highlight the relevance and complexity of team-based incentives. Drawing from the literature on organizational behavior, we then define teamwork and present evidence that workers’ interdependence—the degree to which each worker impacts the outcomes of his/her colleagues’ work—affects how work should be evaluated and rewarded.19 We discuss the implications of this evidence for teamwork in healthcare generally, and the use of teams to promote shared accountability for clinical outcomes and healthcare spending in particular. Finally, we highlight challenges associated with implementing team-based performance measurement and reward systems.

Team-Based Care for Diabetes: A Clinical Vignette

Mrs Smith, a 70-year-old non-smoking woman with type 2 diabetes mellitus, hypertension, and obesity, goes to see her primary care physician (PCP) for a new patient visit. She is insured through Medicare, and her new PCP’s practice recently joined an ACO that is eligible for shared savings and quality performance bonuses through the Medicare Shared Savings Program. In this program, the ACO is given a yearly spending target for its population of patients. If the ACO meets performance thresholds for certain quality measures, and total medical spending for all included patients is below target, then the ACO shares the savings with Medicare.

Mrs Smith was discharged from the hospital 2 weeks ago following a 3-day hospitalization for pneumonia. Prior to discharge, Mrs Smith’s inpatient care team scheduled her for a post-discharge follow-up appointment with her PCP. The hospital discharge summary, discharge medication list, and test results from the hospitalization were forwarded to the PCP’s office. Laboratory tests sent during this hospitalization were notable for an elevated glycated hemoglobin (A1C) of 10.2, reflecting poor control of her diabetes.

Today, the practice’s nurse practitioner (NP) evaluates Mrs Smith’s vital signs and finds that her blood pressure is elevated above the goal for diabetic patients. The NP reconciles Mrs Smith’s current and pre-hospitalization medication lists and the PCP performs a full physical examination. While testing for sensation in her feet, the PCP diagnoses diabetic neuropathy—or decreased feeling—in both feet and a grade I diabetic ulcer in the right foot. At the end of their visit, Mrs Smith and her PCP discuss a plan to better control her diabetes and blood pressure. The PCP increases the dose of Mrs Smith’s blood pressure and diabetes medications, starts a lowdose aspirin, and refers her to a dietician for medical nutrition therapy, an ophthalmologist for a dilated eye exam, and a podiatrist for additional management of her ulcer and peripheral neuropathy. Mrs Smith is also assigned a care manager, who will help organize the patient’s appointments with each provider and facilitate communication of important information between them. All providers are part of the same ACO.

The practice’s NP administers influenza and pneumonia vaccines, and sees Mrs Smith 2 weeks later to check her blood pressure and then every 3 months for A1C measurements and counseling. The clinic’s administrative assistant forwards Mrs Smith’s clinic notes and recent laboratory work to the dietician, ophthalmologist, and podiatrist and uploads them into the ACO’s electronic medical record (EMR). The NP then contacts each provider to clarify Mrs Smith’s management goals, and introduces them to the other providers who will be caring for her. The NP makes it clear that all of Mrs Smith’s providers will be working together to care for her, and will be collectively responsible for achieving the ACO’s quality standards, some of which will include those developed by the Centers for Medicare & Medicaid Services (CMS).1

After a patient visit, each provider posts a note in the shared EHR and forwards this note to other members of the care team. The case manager creates a groupwide e-mail list so that the providers can discuss management decisions and share patient updates. When Mrs Smith returns to see her PCP 1 year later, her A1C and blood pressure are improved, and she has lost 15 pounds. She has not been hospitalized in the past year. The ACO receives a CMS performance bonus for exceeding several ACO quality performance standards, including: performing post-discharge medication reconciliation, influenza and pneumococcal vaccine administration, A1C and blood pressure targets in diabetic patients, and rates of screening for microalbuminuria, retinopathy, and foot ulcers for diabetic patients. Moreover, the ACO’s total spending was less than its Medicare target, so it is eligible to receive shared savings.

This vignette raises at least 2 questions about teamwork and performance incentives: In what sense do the providers caring for Mrs Smith constitute a team? And how should the ACO structure these providers’ performance incentives to promote the achievement of ACO performance goals?

Teamwork: Definitions and Theory

Before considering how to optimally compensate this patient’s providers, we must first decide if they are a team. Teams are commonly defined by the work process they are engaged in and have been characterized as having 4 distinct types: work teams, parallel teams, project teams, and management teams.20 Because the individuals delivering our patient’s care are the ones actually doing the work, her providers are a work team.21 Work teams have some defining features, including: 1) a clearly defined goal requiring multiple individuals working interdependently; 2) boundaries that differentiate between team members and nonteam members; 3) authority and autonomy to manage work processes; 4) stable membership over a reasonable time period; and 5) they possess the essential resources necessary to achieve their goals.22-24 Mrs Smith’s providers meet these criteria for a work team.

Teams are best suited to complete highly interdependent and complex work—tasks for which an individual’s work product and performance depend upon the performance and expertise of others.22 Three forms of work interdependence impact teamwork outcomes: task interdependence, outcomes interdependence, and behavioral interdependence.19 Task interdependence refers to characteristics of work that necessitate that it be performed by multiple individuals (Table 119). Outcomes interdependence refers to whether work performance is evaluated and/or compensated at the level of the team or the individual. For example, Mrs Smith’s providers would have high outcomes interdependence if they were evaluated as a team for meeting certain ACO quality and spending benchmarks. Behavioral interdependence is a function of how well a group of individuals actually work as a team.19 Well-functioning teams are more likely to demonstrate higher levels of achievement21,23,25 and group functioning is influenced by a range of factors (Table 29-11,13-16,19-21,23,26-32).

Organizational research has identified several key lessons about how the structure of a team’s work, its compensation, and its performance evaluation systems influence teamwork quality and work outcomes. First, team effectiveness appears to be highest when task interdependence and outcomes interdependence are congruent. In other words, when multiple individuals need to work together to complete a task, team rewards and performance evaluations can motivate team members to work together more effectively. Conversely, individual performance assessments and compensation for work requiring a team can undermine team effectiveness and impede team performance.19,33,34 Second, the motivational effects of team-based rewards will be blunted, if not lost entirely, if they are not supported by team training and performance feedback systems. Team-based performance incentives improve team performance if team members understand how to build effective teams and how to be good team members, and can see their progress toward a goal.12,15,21,23,25,35,36 Third, overly complex rewards and performance evaluation systems lack motivational power because employees lose sight of the links between work and rewards.33 Fourth, members of work teams appear to derive greater satisfaction from team-based performance incentives than individual incentives.23,24,37,38

These 4 lessons clearly apply to healthcare settings. Indeed, many large integrated health systems—including Kaiser Permanente, Virginia Mason, Geisinger Health System, and The Massachusetts General Hospital—have used team-based incentives and team-based feedback systems to help drive significant improvements in process outcomes, including rates of screening mammography, adherence to protocols for managing diabetes, and hand-washing.26,27,39,40

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