Health Care Company Reward Systems

Health care service providers, institutions and employers are continually challenged to recruit and retain highly qualified, productive staff members in such disparate fields as nursing, medicine, the therapies, and administration (McCoy, 1999). To succeed in meeting this challenge, it is essential for the health care company, regardless of its structure or its specific mission and practice orientation, to develop effective, valued, and performance-based systems of rewards and incentives. This brief report will draw upon the literature to examine the kinds of rewards (both company-wide and one-on-one systems) that are in current use and the relative strengths of each strategy.

In many health care companies, money in the form of wage increases, bonuses, productivity bonuses tied to units of service or some other finite measure, monetary incentives for effective cost-cutting strategies, or profit-sharing continue to occupy a central place in terms of reward systems (Weiss, 1999). Profit-sharing is relatively new to the health care arena, with the exception of the physician-owned hospital, clinic or medical practice. Dr. Joseph Weiss (1999), a physician and practice owner who recently developed a profit-sharing plan that involves four permanent staff members (only one of whom is a physician), contends that profit-sharing can be extremely useful in motivating productivity and performance improvements. This plan allocates to

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th care companies base rewards of this type on cost containment alone. Blue Cross has decided that this strategy is not working as well as it could, and accordingly has elected to eliminate bonuses based on cost containment. Instead, the largest HMO in the United States has now decided that it will reward doctors based on patient satisfaction, by surveying patients, monitoring their grievances, and interviewing people who elect to switch providers. Doctors will also be evaluated on how well they provide preventive care such a breast and cervical cancer exams, with bonus potentials as high as 10 percent of base compensation (HMOÆs move receivesà, 2001). McCoy (1999), however, believes that it is important to position rewards in the health care arena in more than one context. In managed care service providers such as those that are being described in this report, McCoy (1999) claims that personal recognition is needed to balance out against bonus plans and profit sharing. This is due to the fact that staff morale is often highly responsive to social rewards and incentives, also known as intangible rewards. Intangible rewards include feedback that shows support and encouragement for work effort and recognizes achievement abov
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Approximate Word count = 1342
Approximate Pages = 5 (250 words per page)

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