Tuesday, March 30, 2010

Dr. Berwick to Enter P4P Heaven, or is it Hell?

Dr. Don Berwick is the Obama administration's nominee for Chief of the Center for Medicare/Medicaid Services. Berwick founded the Institute for Healthcare Improvement, which grew from the National Demonstration Project on Quality Improvement in Health Care.

The Podesta blogging clan came out strong for Dr. Berwick, but they lack credible management theory. They follow the Obama method, "let's do what's practical, what's achievable," i.e how can we get what we want on a practical political basis? Dr. W. Edwards Deming might call this "off to the Milky Way." It requires no understanding of knowledge, variation, systems, psychology or their interactions.

What might Dr. Berwick face in his new job? The Obama administration clearly believes in incentives, outcomes based pay, pay for performance, or however bribing people to do good work is currently phrased. The Obama team will reform education and health care with incentive schemes, the very practices Dr. Deming decried as antithetical to achieving quality.

Let's look at the current state of federal incentivizing:

Over 70% of federal employees, under pay for performance plans, find the system unfair. A mere 26% find the rating and pay process equitable.

In education the President launched this beauty:

The President will teacher quality by dramatically expanding successful performance pay models and rewards for effective teachers, scaling up federal support for such programs in up to an additional 150 school districts nationwide.

Someone forgot the word "improve" or "increase". It's short of the writing and proofreading mark. That deserves a 95 for English, but the content is one of Dr. Deming's Seven Deadly Diseases.

Don't forget the Veterans Administration bonuses, where people sat on each other's bonus committee. It encouraged horse trading, or "I'll grant you yours, if you'll do likewise."

Federal bank regulators received millions in bonuses, despite missing signs of the financial system meltdown. Then there's the FDA's "employee incentive gift cards:"

Apparently there is little oversight of who gets these informal bonuses.

Stories suggest problems with government efforts to bribe people. An awake America can see the pattern of bad behavior with business leaders. Nearly 30% of executives back dated stock options over a decade long period, robbing millions from shareholders. Few paid any legal price.

Wall Street imploded from layers of incentive schemes, each fostering a race to the bottom on quality. Executives swung for the fences to achieve big payouts. Their vaporware "innovative products" brought the global financial system to its knees.

At one point Dr. Berwick eschewed manipulative reward systems. He's the second Obama appointee with this in their background. Surgeon General Dr. Regina Benjamin was the first. While they occupy key positions, they'll have a wicked headwind in improving quality. The best they can do is ameliorate the damage from reliance on extrinsic motivation systems.

One pundit believes Berwick is now a prominent supporter of pay for performance. I'm not sure that's true.

I look forward to hearing Dr. Berwick's testimony. How will he dance on the edge of Obama's razor blade of extrinsic motivators?

At least the President didn't appoint Nancy-Ann DeParle to implement her Heritage Foundation based health reform plan, crafted by conflicted insiders. She's free to follow Tom Scully into much greener, as in big money, pastures.

Update 4-16-11:  New Scientist raised deep concerns about the very foundation of pay for performance.  It quoted a research study from UK health care system, where years of P4P made zero difference in outcomes for patients with hypertension..

Disclosure: My quality track paralleled Dr. Berwick's during the 80's & 90's. I was an administrator in one of HCA's pilot hospitals, studying under Dr. Paul Batalden and HCA's Quality Resource Group. I moved into quality consulting with Quorum Health Resources, serving as a Strategic Quality Management coach for 10 Georgia hospitals. There I joined the Fraternal Order of the Willing Worker at a Deming 4 day workshop in Costa Mesa, California. (Red Bead Game participants know what this means.) I returned to hospital operations, later leading a community collaborative working to provide access to care for the uninsured in a fourteen county region of West Central Texas.

No comments: