An incentive plan for professional fee collections at an indigent-care teaching hospital

The authors describe the implementation and development of an incentive plan to improve professional fee collections at an indigent-care teaching hospital. They theorized that an incentive plan based on relative value unit (RVU) productivity would increase billings and collections of professional fees. Unique RVU targets were set for individual services based on the number of faculty full-time equivalents and average reported productivity for academic physicians by specialty. The incentive plan was based on the level of expected faculty billings, measured in RVUs, for each department. A "base + incentive" model was used, with the base budget being distributed monthly throughout the year, and the incentive held as a "withhold" to be paid at the year's end only if the billing target in RVUs was met. Additionally, a task force worked with physician billing office and the hospital to improve collections. In the first year after implementation of the system was in place, important increases were noted in total RVU productivity (30.5% over the previous year) and in collections (49.5% over the previous year). Sixteen of 23 departments exceeded their incentive targets, and it was possible to make distributions of professional fees to those departments, to be used within the hospital system to enhance clinical services. Moreover, the plan created an overall positive attitude toward billings and documentation of faculty activities. The authors believe that this kind of incentive plan will be increasingly important for academic faculty working in public hospital systems.

Are managers wasting words on praise?

Praise can be a powerful form of affirmation and a motivator. However, praise also can be given in a way that negates its benefits. To avoid wasting words and maximize the benefits of praise, it must be offered in the right manner and at the right time.

Worldwide business trends create new leverage for voluntary benefits

The recent growth of interest in voluntary benefits has coincided with a decline in resources available to administer benefit programs. Fortunately, technology offers employers a solution to this resources dilemma in the form of portals, which allow employers to provide choice and access to voluntary benefits without concerns about increasing the workload for the benefits staff and without causing confusion among employees.

Employee retention--what can the benefits professional do?

Employee retention, a primary concern for many firms in the current business environment, is most effectively viewed as a strategic problem, one that demands a team approach. The benefits professional should be a vital member of that team, helping to design an employment proposition that will allow an employer to attract and retain the most competitive workforce.

Using fixed financial triggers for incentive plans

Of course, some organizations are making no changes at all, because they don't believe that financial performance will justify paying even small awards. Healthcare organizations with executive incentive compensation plans need to review existing plans with their compensation committees. Merely leaving in place incentive plans developed prior to BBA may be doing a dis-service to the executive teams, the hospital, and the board. Using the incentive plan to focus management's attention on a few key areas is still relevant, maybe more so than ever. A complete review of incentive plans--participation, opportunity levels, financial triggers, performance measures, and other factors--is an important element of total executive compensation, probably now more than ever.

Knowledge workers and knowledge-intense organizations, Part 2: Designing and managing for productivity

Our economy is shifting from a hard goods and material products base to one in which knowledge is the primary mode of production. Organizations are experimenting with designs that support knowledge work by clustering individuals with different but complementary skills in focused teams. The goal is to increase applied knowledge that furthers the organization's strategic intent. The team-based knowledge work model holds promise for healthcare organizations that are under pressure to use knowledge to improve clinical care, integrate care across disciplines and settings, and accept accountability for costs. However, the shift from the traditional bureaucratic model to the flexible team-based design mandates changes in the design of the organization, the role of leadership, and the attributes of the teams and team members. In Part 2 of this three-part series, the authors explore the necessary design changes and the new roles for leadership, teams, and their members. Additionally, implications for healthcare clinicians, particularly nurses, are discussed.

Carrots and sticks: impact of an incentive/disincentive employee flexible credit benefit plan on health status and medical costs

PURPOSE

Employee wellness programs aim to assist in controlling employer costs by improving the health status and fitness of employees, potentially increasing productivity, decreasing absenteeism, and reducing medical claims. Most such programs offer no disincentive for nonparticipation. We evaluated an incentive/disincentive program initiated by a large teaching hospital in western Michigan.

METHODS

The HealthPlus Health Quotient program is an incentive/disincentive approach to health promotion. The employer's contribution to the cafeteria plan benefit package is adjusted based on results of an annual appraisal of serum cholesterol, blood pressure, tobacco use, body fat, physical fitness, motor vehicle safety, nutrition, and alcohol consumption. The adjustment (health quotient [HQ]) can range from -$25 to +$25 per pay period. We examined whether appraised health improved between 1993 and 1996 and whether the HQ predicted medical claims.

RESULTS

Mean HQ increased slightly (+$0.47 per pay period in 1993 to +$0.89 per pay period in 1996). Individuals with HQs of less than -$10 per pay period incurred approximately twice the medical claims of the other groups (test for linear trend, p = .003). After adjustment, medical claims of employees in the worst category (HQ < -$10 per pay period) were $1078 (95% confidence interval $429-$1728) greater than those for the neutral (HQ between -$2 and +$2 per pay period) category. A decrease in HQ of at least $6 per pay period from 1993 to 1995 was associated with $956 (95% confidence interval $264-$1647) greater costs in 1996 than was a stable HQ.

CONCLUSIONS

The HealthPlus Health Quotient program is starting to yield benefits. Most employees are impacted minimally, but savings are accruing to the employer from reductions in medical claims paid and in days lost to illness and disability.

Fostering employee involvement

Every year, the ODA's Economics of Practice Committee, with the help of an independent consulting firm, carries out the Cost of Practice Monitor which tracks the various costs of running a dental practice in Ontario. This article is the result of a joint ODA-Arthur Andersen initiative to provide members with detailed information from the Monitor. Over the next year, there will be a series of articles published under the heading "Best practises for Ontario's Dental Practices." The article featured in this issue focuses on wage expenses in dental practices and how to foster employee involvement as a means of addressing cost-productivity issues. Furthermore, information relating to wage expenses may be used by practitioners to benchmark their practice against the average Ontario dental practice. Appendix C was developed for this purpose. Through benchmarking, the practitioner may gain insight into ways of evaluating their practice and in addressing issues that could improve the management of the practice. For a long time, concepts of best business practises were applied only to manufacturing organizations or large multi-national corporations but experience has demonstrated that these activities are universal to all organizations, including service companies, schools, government and not-for-profit organizations.

Using quality and cost for employee incentives in a reengineered hospital setting

The Mount Sinai Hospital is reengineering its inpatient services to increase the quality of patient care and achieve greater operational efficiency. The central component of this redesign has been the establishment of "care centers," which are administratively and fiscally separate "hospitals within the hospital." To promote quality and financial goals set for each care center, a novel employee incentive compensation program was created. Performance on both quality and financial indicators determines the level of bonus payments to hourly employees. The incentive compensation plan was initiated in the first quarter of 1996. By achieving two of the three performance targets, employees earned a bonus of 6% of base salary for the first two quarters. Nurses and pharmacists did not accept bonus payments because of collective bargaining agreements. The early experience of the Cardiac Care Center has been highly favorable. Changes are planned to improve the process further.

Employee recognition: a little oil on the troubled waters of change

Employee recognition practices and programs have suffered during the recent years of reengineering and downsizing. Frequently seen as a frill or as a direct cost that does not generate a direct benefit, recognition is often among the first expenses to go in a budget-cutting exercise. However, simple recognition can be an extremely powerful employee motivation tool. Regardless of how recognition might be treated at the organizational level, there remains much the individual supervisor can do to recognize employee accomplishments and thus enhance motivation and performance.

Rewarding clinical competence in the ICU: using outcomes to reward performance

The rising acuity of hospitalized patients requires that critical care nurses maintain a high level of clinical expertise. Expert skill levels (critical thinking, technical skills, and interpersonal skills) of clinicians improve patient outcomes that translates into savings for the institution through shorter length of stay and decreased frequency of re-admissions. The authors outline the steps to follow in developing a theory-based career advancement plan that encourages and rewards clinical competence.

Utilizing reward systems to mobilize change

The pressures for change in health care organizations mean that people need to do things differently. Reward systems offer an opportunity to share in the success of the enterprise if they are designed and managed effectively. This article shows how and why they work. Case studies illustrate the key principles in action.