Defense

Physicians, Insurance Companies and Incentives

27 May , 2014  

Incentives motivate everyone.

When someone rewards us for something, we tend to do more of it. Carrots really work.

Insurance giant WellPoint is taking the idea to heart. According to an article in today’s Wall Street Journal, the company will soon start offering oncologists $350 a month for every patient on one of the insurer’s recommended regiments.

This is real money for a physician. The WSJ article quotes a doctor from the Cleveland Clinic saying the payment “…is not something we’d ignore.”

I suspect WellPoint isn’t doing this just to help patients; the company is trying to save money.

It is safe to assume that WellPoint’s regiments won’t include aggressive use of the most expensive therapies. The company will likely encourage physicians to stick with effective and inexpensive drugs.

This sets up a conflict between an oncologist and her patients. Does the oncologist use a therapy with modest efficacy that complies with WellPoint’s guidelines and preserves the $350 per month payment? Or should she try a newer therapy that might work better and take the financial hit?

Incentives in healthcare are complicated.

When making a treatment decision, remember that insurance companies and physicians are motivated by many incentives and the only people 100% committed to your health are you and your loved ones.

 


One Response

  1. davetuchler says:

    re: Wellpoint — I’d be interested to know if payment is in any way linked to results or even compliance, rather than just prescribing the program.

Leave a Reply

Archives

Conversation Across the Site

  • emita Hill { Truly a tragedy on many levels with branding not the least of them. } – Sri Lanka’s Brand Disaster
  • Marina { I believe something to think is also the switch between one generic and the other. Usually the generic proves bioquivalence with one brand, but not... } – Time to Rethink Generic Drugs
  • Blane McMichen { There are some great points in this article. I believe there are a few more problems hidden just below the surface of these waters. One... } – Time to Rethink Generic Drugs
  • toddholscher { Hmmm... I'm always in favor of companies being able to build brands and increase consumer utility. Money attracts brains, so profit is a must. #1)... } – Time to Rethink Generic Drugs
  • Leonard Abels { Thanks for the thoughtful article. It's obviously an important topic. } – Time to Rethink Generic Drugs
  • emitahill { Wow. Hair-raising, especially the theft. Tech problems are ubiquitous. Hope you've had great sales. } – Learning from a Book Tour
  • Read more Comments »

Collaborate with Tim

Tim helps companies around the world build great brands. To schedule a program or event click here. To learn more about Tim’s books, click here.