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Financial Incentives for Residents and Fellows: A Disruptive Innovation to Drive Quality Improvement

Vidyarthi, Arpana R. MD; Baron, Robert B. MD, MS

doi: 10.1097/ACM.0b013e3182308df0
Response to the 2011 Question of the Year

Dr. Vidyarthi is associate professor, Department of Medicine, and director of quality and safety programs in graduate medical education, University of California, San Francisco, San Francisco, California.

Dr. Baron is professor, Department of Medicine, and associate dean for graduate and continuing medical education, University of California, San Francisco, San Francisco, California.

Correspondence should be addressed to Dr. Baron, Office of Graduate Medical Education, 500 Parnassus Ave., Suite MUE 250, San Francisco, CA 94143-0470; telephone: (415) 476-3414; fax: (415) 502-4166; e-mail:

Engaging physicians to improve quality of care and patient safety is fundamental to improve health care. Financial incentives have been successful in engaging and modifying physician behavior both positively by pushing forward improvements, and negatively by fueling individual gains from the current, volume-based payment structure.1 Even with enhanced awareness, an explosion of regulatory mandates, and the emergence of better scholarship and new evidence, however, we have made minimal gains over the last decade to improve quality and safety in our hospitals.2 A new approach is necessary, one that challenges the current structures and equips physicians and physicians-in-training to lead improvement efforts.

Physicians are relatively disengaged from health care delivery reform. In recognition, Accreditation Council for Graduate Medical Education requirements mandate systematic analysis of practice using quality improvement methods and require trainees to identify errors and implement solutions. These and other related skills are essential to develop competence in practice-based learning and improvement and in systems-based practice. In a generation, these newly skilled physicians will be prepared to lead the necessary changes to improve our care delivery; however, a generation is too long to wait.

To further engage physicians and physicians-in-training in quality and safety improvement, we have developed a program that uses financial incentives to engage residents and fellows to advance the quality improvement mission and goals of our organization. University of California, San Francisco, Medical Center is a 600-bed academic medical center which serves as the primary training hospital for 1,200 University of California, San Francisco residents and fellows. Through collaboration between medical center leadership and school of medicine GME leadership, yearly resident and fellow improvement goals are identified with a resulting potential financial incentive of up to $1,200 per trainee. During four years of this program, the medical center has achieved it highest rankings in patient satisfaction, improved compliance on regulatory mandates, decreased the use of unnecessary laboratory tests, and increased hand washing and provider vaccination rates. The program also invites residents and fellows, in collaboration with quality and safety leaders and educational leaders, to propose quality and safety improvement projects that are specific to their clinical departments as a part of the financial incentive. Through this arm of the program, trainee-led initiatives have improved efficiency (such as patient wait times, on-time operating room starts, and reduction of unnecessary laboratory tests), documentation and communication (making contact with primary care physicians, improved handoff processes, accuracy of ICD-9 delineation, and critical result communication), patient care (appropriate vaccinations, timely use of antibiotics, and high-quality asthma treatment), and patient experience (satisfaction with resident care).

A modest investment by the medical center, approximately $700,000/year, has resulted in a profound positive return. For many of the initiatives there is a tangible cost saving or cost avoidance which more than covers the costs of the program. The true benefit, though, lies in the engagement of the trainees. From the medical center perspective, there is now a cohort of trainees who have skills and are engaged in the quality and safety mission of the hospital. They can be called on to lead their peers and superiors into engagement. From the training program perspective, these residents are achieving true competence in system-based practice and practice-based learning and improvement.

Personal learning from the trainees leading these efforts reveals two broad themes: Quality improvement work is messy and hard, and small changes can lead to major impact. By integrating the residents and fellows into the real work of quality and safety improvement, along with a scaffolding of support and incentives, we harness their existing skills and experience, leverage the apprenticeship type of learning that is the foundation of our clinical training, and provide an experience that reflects future practice.

This program advances our understanding between medical education and improved health in three important ways: (1) by demonstrating the importance of crossing the aisles from hospital to school and education to administration to find common goals, (2) by demonstrating the potential of trainees to be “part of the solution” as opposed to being “part of the problem” of health care delivery, and (3) by harnessing existing physician-in-training experience, skills, and expertise. With this sort of collaboration, we don't need to wait for the next generation of doctors; rather, this collaboration, which engages administrators, faculty, and trainees, might be a necessary disruption bringing us further on the road to better healthcare.3

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1Greene SE, Nash DB. Pay for performance: An overview of the literature. Am J Med Qual. 2009;24:140–163.
2Landrigan CP, Parry GJ, Bones CB, et al. N Engl J Med. 2010;363:2124–2134.
3Christensen C, Grossman J, Hwang J. The Innovator's Prescription: A Disruptive Solution for Health Care. New York, NY: McGraw Hill; 2009.
© 2011 Association of American Medical Colleges