Amanda Hardesty, 801069183, HCA 342

Chapter 11 Discussion Questions

1. Assume you are a manager at a low budget healthcare setting (e.g. local health
department). What will you do to recruit new staff and to motivate current employees
when competitors in the area are able to pay 30% to 40% more than your organization
can?
According to the text on page 283, many healthcare workers often find other
motives besides pay to stay in their current positions. Intrinsic rewards such as
helping others and self-satisfaction are big motivators to keep healthcare workers
where they’re at. Good compensation systems and policies are also very important
to create in healthcare settings. One of the biggest motivators to retaining

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employees is to meet the needs of the employees by offering performance-based

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rewards, maintaining competitiveness, and attracting high-performing employees.

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To recruit new staff, I would focus on advertising our compensation system. I
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would focus on rewards and benefits as well as promotion opportunities. While
pay is important, most people like to feel valued at their work. People want to feel
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like they are getting something in return for their hard work. If I couldn’t reward
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them with higher pay, I would find a way to reward them with other incentives.
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2. Assume that you are a staff nurse in a hospital that uses an incentive compensation
system. Do you have an obligation to disclose the nature of the compensation
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arrangement to patients? If so, how should this information be communicated and by

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whom?
According to the text on page 286, guidelines on salaries and incentives should be
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kept confidential to the recipient and the managers as well as any others that must
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be involved. I do not believe that there is an obligation to disclose this

information to patients. If the patient is curious or wants to know about any
possible incentive system, they should be able to direct their questions to the
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managers who are in charge of the incentive program. I believe that if a nurse or
physician wants to give out this information to their patients then they can, but I
do not think that it should be mandatory to do this prior to giving care.
I believe any communication about an incentive compensation system should

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 always involve the manager in charge of the system.
3. Regardless of your personal feelings about pay for performance, what cautions will you
communicate to a team that is designing an incentive system in a healthcare organization?
According to the text on page 286, pay-for-performance can cause problems when
you take into account environmental concerns. Sometimes, there are events that
happen outside of the organization’s control that can affect performance, which
would also affect pay. Another complication that can occur is that third-party
payers have also established pay-for-performance incentives. These can result in
unwanted consequences especially taking financial concerns into account.
4. How will you design a team-based compensation system such that free riders (or
“loafers”) on the team cannot take advantage of the system?

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According to the text on page 297, team-based rewards can cause problems by

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offering everybody the same reward regardless of effort. In order to combat this

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problem, I would employ a balance between team rewards and individual
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rewards. An example of this can be team incentives which are known as variable
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pay. Individual performance can be linked with team incentives by monitoring the
individual members.
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5. How can job evaluation procedures be used to determine if a healthcare organization is

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undercompensating its female employees?

According to the text on page 292, job evaluation is a process used to determine
the value of a job in monetary terms. Job evaluations are used to conduct pay
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surveys. These pay surveys help to ensure that the pay system of an organization
is both internally equitable and externally competitive. Job evaluations basically
determine how much a job is worth based on required skill, knowledge, and levels
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of difficulty. During job evaluations, benchmark jobs are pinpointed. These jobs
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require the same level of knowledge, skill, and difficulty and performed by
individuals of the same abilities with similar job duties. This aspect of the job
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evaluation could determine whether females are being underpaid for doing the
same job with similar duties as a male. This is especially evident in those
benchmark jobs.
6. What effects has managed care had on designing physician compensation models?

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 According to the text on pages 303-304, physicians used to deliver care on a fee-
for-service basis. Once patients were no longer responsible for the direct cost of
their healthcare, third party payers and physicians no longer had to justify the
costs of care. This led to physicians being paid for whatever they requested
without any type of validation.
Managed care led to a different payment system to modify clinical behavior. The
original fee-for-service caused physicians to use excessive services and neglected
future and preventive care for their patients. The shift to managed care gave
physicians a compensated amount per patient, which led them to give each patient
the best care they possibly could.
7. What are the likely roles for capitation and fee-for-service reimbursement in the future?

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According to the text on page 304, capitation is a payment system that pays

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providers a certain amount per patient. This covers all services required for proper

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care of each patient. Any money left over would go as revenue to the providers.
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Capitation is meant to motivate providers to perform the best care for their
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patients without using an excessive amount of services and increasing costs.
Fee-for-service tends to cause providers to neglect preventive care and use an
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excess amount of services.

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8. For a four-person surgical group, what kind of formula may be devised to fairly and
consistently measure and reward productivity? What changes may be needed if one
surgeon decides to perform more office work and less surgery?
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According to the text on page 306, solo and group practices traditionally use a
fee-for-service reimbursement and salary plus incentive. In order to do this, the
manager could average the amount of surgeries performed by each surgeon and
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compare it to the specific amount performed by each surgeon to reward their

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individual productivity. If one surgeon decides to perform more office work it

would decrease the average number of surgeries performed which would affect
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the other surgeons in the practice. Independent practice associations typically

consist of group and solo practices that take advantage of economies of scale and
can negotiate a contract with the other three surgeons.

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