Behavioral economics provides insights about the development of effective incentives for physicians to deliver high-value care. It suggests that the structure and delivery of incentives can shape behavior, as can thoughtful design of the decision-making environment. This article discusses several principles of behavioral economics, including inertia, loss aversion, choice overload, and relative social ranking. Whereas these principles have been applied to motivate personal health decisions, retirement planning, and savings behavior, they have been largely ignored in the design of physician incentive programs. Applying these principles to physician incentives can improve their effectiveness through better alignment with performance goals. Anecdotal examples of successful incentive programs that apply behavioral economics principles are provided, even as the authors recognize that its application to the design of physician incentives is largely untested, and many outstanding questions exist. Application and rigorous evaluation of infrastructure changes and incentives are needed to design payment systems that incentivize high-quality, cost-conscious care.

The objective of this study was to review the development of a multidisciplinary asthma disease management program in a large medical group practice in an urban area, and evaluate the impact of the program on processes of care and health care utilization for adults and children with asthma. The disease management intervention included the development of a patient registry, a systematic approach to assessment of asthma control using the Asthma Therapy Assessment Questionnaire (ATAQ), case management, and physician education. An administrative database was used to examine hospital admissions and emergency department (ED) visits. A medical record audit was conducted to examine recorded compliance with asthma guidelines and documentation practices. The baseline study population included 3486 adults and children with asthma. The ATAQ suggested that, at baseline, control problems were frequent, with 34% of adult respondents missing work because of asthma. ATAQ also revealed several areas for care improvement. For example, only 20% of adult respondents reported having a written treatment plan. The chart review and administrative claims analyses showed that the program had beneficial results in several areas. Medical record documentation improved for asthma diagnosis (83.3% vs. 98.6%; p < 0.001) and patient education (15.7% vs. 26.1%; p < 0.001). No improvements were seen in documentation of peak flow ownership/use, smoking cessation advice, or influenza vaccination. ED visits related to asthma decreased from 148 per 1000 to 88 per 1000 (p < 0.001), and hospitalizations related to asthma decreased from 81 per 1000 to 37 per 1000 (p < 0.001). The outcomes suggest that this program was associated with a marked reduction in rates of hospitalization and ED usage for asthma, as well as significant improvement in several essential processes of care.

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The Affordable Care Act encourages the formation of accountable care organizations as a new part of Medicare. Pending forthcoming federal regulations, though, it is unclear precisely how these ACOs will be structured. Although large integrated care systems that directly employ physicians may be most likely to evolve into ACOs, few such integrated systems exist in the United States. This paper demonstrates how Advocate Physician Partners in Illinois could serve as a model for a new kind of accountable care organization, by demonstrating how to organize physicians into partnerships with hospitals to improve care, cut costs, and be held accountable for the results. The partnership has signed its first commercial ACO contract effective January 1, 2011, with the largest insurer in Illinois, Blue Cross Blue Shield. Other commercial contracts are expected to follow. In a health care system still dominated by small, independent physician practices, this may constitute a more viable way to push the broader health care system toward accountable care.