A well-designed micro-incentive program can drive high-quality, cost-conscious care by rewarding a physician or healthcare provider for taking a specific action. Behavioral science shows that micro-incentives can and do work. But, how do you get started with implementing them?

It’s well-accepted that value-based care (VBC) provides a pathway to more affordable, efficient, and higher-value healthcare. However, even if you believe VBC can deliver on these goals, there are many roadblocks on the path to adoption. Finding the right partners, designing a model, contracting, concerns over fair reporting, managing performance, and payment reconciliation are just a few of the reasons providers may be disincentivized to participate in a VBC model.

So how can we incentivize value-based behaviors and drive value-based results while avoiding some of these common challenges?

Many leading organizations are looking to micro-targeted provider incentive programs – or micro-incentives – that leverage behavioral science to drive value-based behaviors without having to implement new contracts or restructure payment models.

What are micro-incentives in healthcare?

A micro-incentive is a targeted outcome-based benefit – typically in the form of payment – that rewards a physician or healthcare provider for a specific action that results in a better outcome for their patients. Micro-incentives are designed to motivate high-quality, cost-conscious care.

To illustrate, “[As a healthcare provider] imagine a popup that said, ‘If these three things were done today, it would result in such good things happening from an outcome point of view that it’s worth $200 in bonuses for you today.’”

Putting yourself in the shoes of that provider, you can begin to imagine how seeing in real-time that you can earn $200 for taking three actions that will drive better outcomes for your patients, you might be more inclined to do those three things. Seeing this alert, you can make a direct connection between your actions or recommendations and the outcomes for your patient.

Are micro-incentives effective in healthcare?

The incentive platforms and programs in the market today are narrowly focused on gaps in care and coding strategies, with the goal of impacting revenue versus medical spending. Unfortunately, this limited approach doesn’t increase provider awareness of referral patterns and associated costs. However, by leveraging behavioral economics to offer personalized ‘carrots’ instead of ‘sticks,’ it becomes possible to reframe the payer-provider relationship and displace the inefficient and ineffective models of the past.

From the Clarify perspective, we’ve seen micro-incentives work well. In a controlled study, micro-incentives generated more than eight dollars in savings to a health plan for every incentive dollar spent (8:1 ROI). Similarly, in an example Jean Drouin, MD, shared with PYMTS, a group of orthopedic surgeons saved $4 million in a six-month period using value-based, micro-incentive payments.

How to get started using micro-incentives

In lieu of waiting for a major overhaul by CMS to drive mass adoption of value-based care, health plans and providers can work together to align on bite-sized programs that can make a big difference in the cost and quality of care delivery. A well-designed incentive delivered to the right person at the right time will drive the highest possible efficiency in return on investment (ROI).

Here are some tips to get started:

  1. Curate “Mini Narrow Networks” at the provider level.
  2. Make sure your incentives reach the real decision-makers (practice staff, MDs, or referral coordinators) – not just the bottom line.
  3. Use flexible program engagement models vs. one-size-fits-all.
  4. Create personalized goal models rooted in evidence-based design and behavioral science.
  5. Use a coaching model rather than performance readouts to ensure real value-add for providers.

These are 5 key elements we’ve identified as critical to the success of any micro-incentive program and are core to any model designed in Clarify Advance, our in-house micro-incentive software solution. Changing ingrained practices can be difficult, but with the right nudge, providers can – and want to – change.

To learn more about this topic or Clarify’s solutions, contact us.