Gainsharing program employed by 12 NJ hospitals

While the practice of gainsharing--paying physicians as an incentive to help facilities save on costs--typically is not allowed by federal law, creative providers sometimes take advantage of loopholes. And that's exactly what 12 hospitals in New Jersey are doing in an attempt to not only help their finances, but also to improve patient care, according to an article in USA Today

Normally, hospitals are paid a set amount with regard to a patient's diagnosis, with physicians receiving compensation for each service provided. According to Dr. Alan Pope, a vice president at Our Lady of Lourdes Medical Center in Camden--one of the 12 facilities participating in this program--while the payments to doctors might not increase by a lot, the increase still could be enough of an incentive for physicians to go along. The article reports that incentives for saving a hospital money could be "as much as $300 for a surgery patient and $100 for other admitted patients." 

According to Sean Hopkins, senior vice president of the New Jersey Hospitals Association, 50 percent of the state's hospitals are losing money every year, while Medicare has only reimbursed those facilities for just under 90 percent of the costs. Furthermore, the cost per day for a hospital to house a patient is expensive--at Our Lady of Lourdes, the average cost for a patient staying one day is roughly $2,500--which clearly shows the benefits for such a program for facilities. 

Similar programs have also been implemented at Beth Israel Medical Center in New York and Charleston Area Medical Center in West Virginia. 

For more information on this gainsharing program:
- check out this USA Today article