Improving Incentives to Free Motivation

This brief calls for an approach to payment reform that harnesses the inherent motivation that doctors and patients have to make good decisions about health care. The authors reject the assumption that health care costs will drop and quality will improve if policymakers and payers simply find the right mix of rewards (“carrots”) and punishments (“sticks”). The report draws on a large body of research that shows external incentives designed to change simple behaviors, like improving productivity in rote tasks, do not work for more complex behaviors. The report also analyzes cost and quality variability data for over 20 health conditions, identifying those (such as diabetes and coronary heart disease) most ripe for incentive experimentation and reform.