Misplaced Incentives Research Articles

ASA score and procedure type predict complications and costs in maxillofacial reconstructive surgery: a retrospective study using a hospital administrative database.

Reconstruction of osseous and soft tissue defects after surgical resection of oral cavity cancers can be achieved by a single-stage procedure with a microvascular bone flap or by a two-step approach with a soft tissue flap and subsequent bone augmentation. The therapeutic approach should be selected based on the patient’s needs. Economic pressure requires preoperative risk assessment and estimation of the postoperative course. Flat-rate reimbursement systems via diagnosis-related groups with insufficient morbidity adjustments and financial sanction of medical complications might additionally cause false incentives in the choice of treatment. This study aimed to assess the influence of the type of flap chosen for maxillofacial reconstructive surgery on the total costs. Complication rates of different types of flap surgery and their prediction by a preoperative risk assessment tool (American Society of Anesthesiologists [ASA] score) were determined. Overall, the fairness of the current reimbursement system was rated. Patient characteristics, clinical data, and data on total costs and reimbursement of patients aged 18 years and older having undergone maxillofacial reconstructive flap surgery at the University Hospital of Zurich (Switzerland) between 2012 and 2014 were analysed. The preoperative risk was classified by the ASA score. Complications were graded according to the Clavien-Dindo classification system and the comprehensive complication index (CCI). Statistical analysis included Spearman and Pearson rank correlation, Kruskal-Wallis and Mann-Whitney nonparametric tests, and linear regression analysis. 129 patients were included in this study. Soft tissue flaps were performed in 82 patients, of which 56 were radial forearm flaps (43.4%), bone flaps in 41 patients, of which 32 were fibula flaps (24.8%), and combined flaps in 6 patients (4.7%). Patients with fibula flaps showed a significantly higher CCI and higher total costs. Higher preoperative ASA scores were significantly associated with increased length of stay, total costs and complications. Both the ASA score and reconstruction with a radial forearm flap were significant predictors of complications and total costs. Total median costs for radial forearm flaps were CHF 50,560 (reimbursement: CHF 60,851; difference: CHF 10,291) and for fibula flaps CHF 66,982 (reimbursement: CHF 58,218; difference: CHF −8,764). The ASA score allows a reliable preoperative assessment of patient outcomes and financial burden in maxillofacial reconstructive flap surgery. The type of flap reconstruction significantly influences complications and ultimately total costs. The current reimbursement system via diagnosis-related groups (DRGs) does not take sufficient account of this fact. Adaptations are therefore needed to prevent misplaced incentives to the detriment of patients.

LED there be light: The impact of replacing lights at schools in South Africa

South Africa’s private sector – under significant pressure to become energy efficient and employ sustainability principles – has long been implementing energy-saving mechanisms. Unfortunately, there seems to exist many misplaced incentives in South Africa’s public sector that prevent it from embracing energy-efficient technology. With the falling cost of LED lighting and the rising cost of electricity, however, conversions are increasingly cost-efficient. Effecting these changes are increasingly urgent given the national utility-imposed rolling blackouts and climate change concerns. The primary education sector is a particularly attractive test case, since money saved on utilities can be allocated to desperately needed value-adding services in schools. From a technical perspective, however, the cost-benefit of replacements and the range of options facing decision-makers could be overwhelming. To assess the impact of replacing fluorescent lights with LED lights at schools in South Africa, we propose a model that draws on smart metering data, a bench-test assessment of available LED lights and tariff rates. The model was validated with field tests at three schools and used to assess the impact at seven local schools. The results show that the setup cost differs substantially from the life-cycle cost, and that buying the cheapest lights could prove to be the costliest decision over the light’s life cycle. The results also show that lights contribute from 31% to 57% of electricity expenditure, and that monetary savings of 21% to 39% are achievable by replacing fluorescent tubes with the most efficient LED lighting option available.

Does performance pay increase productivity? Evidence from a medical typing unit

Using unique data from a medical typing unit (2011–2014), this paper empirically explores the influence of performance pay on employee productivity in a risk-less low incentive intensity environment. We analyze a routine task performed by lower-level employees. We analyze a setting with strong sectoral agreements and thus a clear (and comparatively high) basic wage level set by the general collective bargaining agreement. We find that despite the risk-less design and low incentive intensity of the setting, switching employees from fixed wages to partially performance-based compensation (PPBC) significantly increases the number of typed pages by 9.53%. Over a one-year period, this rate of increase translates into approximately one additional month of output at a fraction of the usual cost. We also find that these results do not disappear over time. In contrast, the observed gains split into an initial increase in productivity following the switch to PPBC (+3.25%) and additional gains while an employee remains on PPBC. Therefore, we assume that a type of learning begins once an employee switches to PPBC and that this learning is the most pronounced during the first months following the change in compensation. Furthermore, we find no evidence of potentially misplaced incentives in the selection of tasks by the employees (i.e., cherry picking) and no indications of reduced quality.

Missed targets and misplaced incentives? The case of parent undertaking requirement in the USA and in the EU

Abstract Currently, most of the legal acts or even non-binding standards in the field of banking law strive to achieve a golden middle between financial stability and globalized development. Apart from the widely discussed post-crisis regulatory actions concerning for example capital buffers, leverage, or liquidity, there has been one relatively recent requirement that also influences the functioning of global banks. The intermediate holding company requirement introduced in the USA and the EU intermediate parent undertaking rule require foreign banks to establish a separate entity in the host country that would group under one roof all their subsidiaries incorporated in the respective jurisdiction. This paper offers a comprehensive comparative analysis of these legal structures, clarifying regulators’ objectives behind the concept, assessing its functioning in the US and EU regulatory frameworks and potential indirect consequences, which indicate that this solution does not fulfill its regulatory goals and thus does not contribute to the balance between financial stability and globalization.

You can't get there from here: misplaced incentives can undermine the goals of health care reform in the NICU setting

You can't get there from here: misplaced incentives can undermine the goals of health care reform in the NICU setting

Unintended consequences of performance measurement in healthcare: 20 salutary lessons from the English National Health Service

The objective of the study is to review the evidence on the consequences associated with the introduction of national performance measurement systems in the National Health Service (NHS), with the aim of informing the development of similar national performance measurement programmes proposed for Australia. Narrative review of the published evidence on the unintended and adverse consequences of performance measurement systems in the NHS is the data source. We identified 20 different dysfunctional consequences of national performance measurement systems in the NHS in four headings. These are poor measurement (measurement fixation, tunnel vision, myopia, ossification, anachronism and quantification privileging), misplaced incentives and sanctions (complacency, silo-creation, overcompensation, undercompensation, insensitivity and increased inequality), breach of trust (misrepresentation, gaming, misinterpretation, bullying, erosion of trust and reduced staff morale), and politicisation of performance systems (political grandstanding and creating a diversion). Performance measurement programmes can contribute to systems improvement, delivering benefits to health services and patients, as evidenced by the dramatic reduction in waiting times in the NHS following the incorporation of targets and indicators for waiting times. Nevertheless, experience from the NHS shows that in addition to generating desired improvements, performance measures can induce a range of unintended and dysfunctional consequences. We recommend Australia to heed the lessons of the NHS, and strive to balance effective performance measurement and management against the potential drawbacks and adverse consequences. Any national performance measures need to be piloted and carefully evaluated to assess potential benefits and pitfalls.

Appraisal of policy instruments for reducing buildings' CO2 emissions

The building sector currently contributes approximately one-third of energy-related CO2 emissions worldwide. It is economically possible to achieve a 30% reduction. However, numerous barriers such as financial and behavioural issues, market failures, and misplaced incentives prevent the realization of the high economic potentials. Which policy instruments are the most appropriate and cost-effective for reducing these barriers? To address this question, 20 policy instruments were assessed for their effectiveness in reducing emissions, cost-effectiveness, applicability and special conditions for success. The appraisal is based on over 60 ex-post policy evaluation reports from about 30 countries and country groups, representing best-practice examples of the application of these instruments. Appliance standards, building codes, tax exemptions and voluntary labelling were found to be the most effective policy instruments contrary to others such as Kyoto Protocol flexible mechanisms or energy/carbon taxation. The most cost-effective instruments, all achieving energy savings at negative costs for society, were appliance standards, demand-side management programmes and mandatory labelling. Since all policy instruments have limitations and only help overcome some barriers, they are most effective if combined into policy packages designed for the respective location, economy and culture. Le secteur du bâtiment est actuellement responsable d'environ un tiers des émissions de CO2 dans le monde liées à la production d'énergie. Il est économiquement possible de réduire ces émissions de 30%. Toutefois, de nombreux obstacles comme les questions financières et comportementales, les échecs commerciaux et des incitations mal orientées empêchent d'atteindre cet objectif. Quels sont les moyens d'action les plus appropriés et les plus rentables pour réduire ces obstacles? Pour répondre à cette question, on a évalué 20 de ces moyens en ce qui concerne leur efficacité à réduire les émissions, leur rentabilité, leur applicabilité et les conditions particulières pour assurer leur succès. Cette étude repose sur 60 rapports d'évaluation d'incidence concernant une trentaine de pays ou groupes de pays; ils donnent des exemples des meilleures pratiques de l'application de ces moyens d'action. Les normes des appareils, les codes du bâtiment, les exemptions fiscales et l'étiquetage volontaire se sont avérés être les moyens les plus efficaces contrairement à d'autres comme les mécanismes souples du Protocole de Kyoto ou la fiscalité de l'énergie/carbone. Les moyens les plus rentables, qui permettent tous des économies d'énergie à des coûts négatifs pour la société, sont les normes des appareils, les programmes de gestion de la demande et l'étiquetage obligatoire. Vu que tous les moyens des limitations et ne font que seulement contribuer à lever certains obstacles, leur efficacité est maximisé quand ils sont combinés en fonction des différents lieux, des conditions économiques et de la culture. Mots-clés: parc de bâtiments, réduction du CO2, changement climatique, instruments économiques, efficacité énergétique, atténuation, politique publique, réglementation

Closing the efficiency gap: barriers to the efficient use of energy

Only half of the potential for improving U.S. energy efficiency over the next 20 years is likely to be achieved, given current government policies and programs. This large untapped potential to save money, improve environmental quality, and reduce the foreign trade deficit exists because of structural and market barriers that inhibit adoption of cost-effective energy-efficient practices and measures. Structural barriers include distortions in fuel prices, uncertainty about future fuel prices, limited access to capital, government fiscal and regulatory policies, codes and standards, and supply infrastructure limitations. Behavioral barriers include attitudes toward energy efficiency, perceived risk of energy-efficiency investments, information gaps, and misplaced incentives.