The Independent Review
(Quarterly Journal)
Policy Reports
The Lighthouse
(Email Newsletter)
Commentary Articles
News Releases
Audio and Visual Programs
The Independent
(Quarterly Newsletter)
Research Articles
Working Papers
Course Adoption Program


Facebook Facebook Facebook Facebook

Your participation will advance liberty. Join us as an Independent Institute member.

Contact Us
The Independent Institute
100 Swan Way
Oakland, CA 94621-1428

510-632-1366 Phone
510-568-6040 Fax
Send us email

Interested in working with us?  Click here for more information.

Working Paper #32

You Get What You Pay For: Result-Based Compensation for Health Care


Abstract: This article proposes greatly increased use in the health care sector of incentive arrangements that tie providers’ compensation to the outcomes they deliver for patients. Although result-based compensation arrangements (RBCAs) are used frequently in other principal/agent relationship, insurers, employers, managed care organizations, and other health care payers rarely use them to link providers’ economic interests to patients’ interests in enjoying good health. The need for health care RBCAs is apparent. Studies of health care quality repeatedly uncover serious problems: underutilization of valuable services; overutilization of ineffective services; significant practice variations; significant differences in mortality and morbidity rates across providers; unacceptable accident rates; and widespread failures to use proven safety techniques. After briefly surveying the quality of care literature, this article explores the potential for RBCAs to ameliorate these problems by incentivizing providers to use better judgment when recommending treatments and to use better procedures when delivering care. The article also responds to ethical, technical, and other objections to RBCAs and discusses examples in which health care RBCAs have been used with success.

Home | About Us | Blogs | Issues | Newsroom | Multimedia | Events | Publications | Centers | Students | Store | Donate

Product Catalog | RSS | Jobs | Course Adoption | Links | Privacy Policy | Site Map
Facebook Facebook Facebook Facebook
Copyright 2015 The Independent Institute