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Home / News & IndustryManaged Care Insight and Analysis
Updated: January 5, 2010
Gainsharing: Aligning Incentives For Physicians And Hospitals

Twelve New Jersey hospitals, Beth Israel Medical Center in New York City and Charleston Area Medical Center in West Virginia, are participating in the Gainsharing Demonstration, along with more than 1,000 physicians working at those three hospitals.

The program is evaluating gainsharing as a means of aligning incentives between hospitals and physicians to improve quality of care and overall hospital efficiency.

The idea is to break the iron grip of fixed hospital payments and fee-per-procedure that physicians now receive.

"This is a bold test to see if we can redesign the failed system of the past and replace it with strategies that keep healthcare affordable while making it better and safer for patients," said Betsy Ryan, president and CEO of the New Jersey Hospital Association (NJHA). "That’s essential as we embark on a national effort to reform our healthcare system."

The demonstration is designed to track patients beyond a hospital episode to discharge to determine the impact of hospital-physician collaborations on preventing short- and long-term complications and duplication of services.

Gainsharing is designed to encourage physicians and hospitals to work together to provide the most efficient care for patients, and offers physicians financial incentives to work with hospitals in lowering costs in a variety of ways. The program also includes stringent quality controls to protect patients.

"It’s a simple, elegant idea to align incentives of doctors and hospitals – all with the ultimate goal of creating a better healthcare outcome for the patient and eliminating unnecessary costs from our healthcare system," said Michael Kalison, chairman of Applied Medical Software, who worked with NJHA to design the pilot project.

For additional information on VBP demonstrations, visit

  This article was taken from:
Pay-For-Performance Reporter

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