The NY Times on Friday examined some hospitals' efforts to cut back on rising expenses through gainsharing, in which they pay bonuses to physicians who save money by using certain brands or less supplies. While the new approach gives doctors a "financial incentive to be more cost-conscious, it also fundamentally recasts the traditional arm's-length relationship between a hospital and the doctors who practice there," the Times reports. Such arrangements must be approved by federal regulators, who address concerns about inappropriate use of less-expensive devices by requiring hospitals to develop guidelines that determine when more sophisticated and expensive devices are necessary. The idea has attracted some interest from federal lawmakers. Rep. Nancy Johnson (R-Conn.) is considering introducing legislation that could foster hospital and doctor cooperation in savings programs. Savings are "fairly easy to achieve in the early going," according to the Times, but it is "debatable whether doctors can generate enough savings year after year to make it worth continuing gainsharing programs." Some critics fear that gainsharing "could induce doctors to put money matters ahead of the interests of patients," the Times reports. In addition, device-makers worry that their profits could sag when hospitals negotiate discount prices when buying in bulk. The Times profiles a gainsharing program implemented by Pennsylvania's PinnacleHealth System (Abelson, New York Times, 11/18).

New York Times

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