New breed of CIO: Chief Incentive Officer

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A new CIO is in town. Not to be confused with chief information officer, a growing breed of "chief incentive officers" is infusing the healthcare industry with the new-found emphasis on cost savings through better health management. The chief incentive officer examines ways to change behaviors toward a particular goal. Applied to general health and wellness, incentives can work for both patients and caregivers in promoting better care management across all fronts.

"Virtually every organization would need a chief incentive officer," said President and CEO of IncentOne Michael Dermer in an interview with FierceHealthcare.

Sometimes an offshoot from the "chief innovation officer," the chief incentive officer focuses on one aspect of innovations, that is, incentives. As Dermer notes, the chief incentive officer role can incentivize a number of organization-wide initiatives, such as getting physicians to e-prescribe or getting staff to improve procedure times. However, more specifically, these officers can also boost the health of both patients and providers, in keeping diabetics to take their medications or even keeping physicians on a healthy diet.

How do they do it? Through the art and science of incentives.

According to a recent IncentOne white paper (reg. required), organizations can achieve desired outcomes with the following strategies:

Identify what type of behavior you're trying to incent
A study by Thomson Reuters last week found that hospital workers actually have higher healthcare costs than other industries by 10 percent, compared to the general population. Ironic as it is, hospital employees were less healthy and more likely to be diagnosed with chronic medical conditions. Further, the average annual healthcare cost for a hospital employee and his or her dependents was $4,662, outpacing the general population by $538.

Clearly define the goal and why you are trying to reach that goal. In this case, it might be to improve the health of your medical staff in one specialty. Consider starting small rather than launching a wide-scale program, and remember to keep the incentives lively by changing them up once in a while.

Understand what will motivate your employees and what won't
Not everyone will find one incentive as valuable as another person. As a general rule of thumb, immediate gratification works more often than delayed rewards.

The next logical question is how much money does it actually take to make someone abide by the wellness program--to exercise, to watch what they eat, or to engage another health modification. According to another IncentOne white paper (reg. required), to achieve a desired participation rate of 60 percent in wellness programs, it would take an incentive value of at least $356. For each increase of $100, IncentOne researchers found that participation would increase by an additional 7 percent, with a maximum of 100 percent participation for an equivalent $900 incentive value.

Identify your preferred method of incentives
The incentive can take other forms besides pure cash, such as a gift card, food, personal services, or discounts. Often, cash or another financial equivalent may prove the most impactful.

"There are different types of incentives, but we believe the dollar value is key," said Dermer. "For clinicians, the dollar value would have to be meaningful enough for them to act. That incentive for clinicians tends to be pure cash, whereas for a member of a health plan, it might be money off [his or her] insurance premium or money into a health savings account."

Communicate
Of course, employees must understand what they are expected to do in order for them to do it. Clearly communicate the goals and rewards to them. Remember to start early and to keep the rules simple so that the goal is achievable.

Adopt a culture of health at the workplace
For a health and wellness program to work, the entire organization also must adopt the principles behind it and its overall mission. For example, an exercise program wouldn't do as much good if the hospital cafeteria only featured unhealthy options, according to the white paper. Committing to health across all areas helps to incentivize those who work there and maybe even those patients who visit there.

What's the value in offering incentives? According to Dermer, "Incentives are the engine that drive that return on investment."

Organizations already are incentivizing staff--maybe successfully or unsuccessfully--in piecemeal with national initiatives coming down the pike, according to Dermer.

"They're doing this today, but not as a formal role or strategy. They're already spending significant dollars and using pieces of other roles to do this today. The question is whether you think incentives are critical to unlocking the value of your health solution."

Incentives may not be anything new. Parents have been doing it for years, bribing their children to stay quiet for candy or retail managers dangling commission in front of sales agents. However, creating an in-depth incentives strategy may be a more cost-effective way of carrying out health reform. As providers, payers, and patients continue to interact in forthcoming accountable care organizations, incentives may be just the trick to ensuring that patients (and caregivers) stay healthy. - Karen (@FierceHealth)