Incentives

How Incentives Work

Incentives motivate and competition works.

A car company offers no-interest loans to motivate buyers. Others quickly follow suit. You select one make over another because it offers more options for the same price.

Incentives drive action and change. You are given a reason to care about making a good choice, and the marketplace is changed as others provide incentives in order to stay competitive.

Changing Health Care

It is time to let value-driven competition make an impact on health care.

What if, when going for an elective treatment such as a knee replacement, you are given options: health care professionals who provide high quality at high costs; those who provide low quality at low costs; and everything in between? Suddenly, you have information you need and a personal incentive to care.

Incentives are not just for consumers. In the future, incentives for doctors and hospitals will be part of the payment structure. Already, insurance plans and Medicare are experimenting with pay-for-performance incentives and competitive bidding for services where doctors and hospitals are rewarded for quality outcomes.

Once transparency unveils price and quality information, and incentives are in place to drive quality-based decisions, real change starts to happen.

People need to know price and quality. People need to care about price and quality.