IHI.org - A resource from the Institute for Healthcare Improvement
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Change the Work Environment:
Share Risks

In any business, there are risks to take with potential rewards to receive or losses to absorb. Many people become more interested in the performance of an organization when they can clearly see how their future is tied to the long-term performance of the organization. Developing systems that allow all employees to share in the risks of the organization can lead to an increased interest in the performance of the organization by all. Some of the types of plans to share risks and gains include profit sharing, gain sharing, bonuses, and pay for knowledge. Care must be taken with these types of programs. Companies can undermine workers' job satisfaction and creativity by placing too much emphasis on extrinsic motivation from incentives. Systems must be carefully designed to keep everyone focused on the purpose of the organization and not just the potential short-term gains.




Examples of Tests of this Change

In health care organizations that are working on improving care for people with chronic illness, there is a risk that, as care improves and people manage their illnesses better, revenues will be lost as hospitalizations drop. On the flip side, there will be cost savings for payers if admissions are averted. If hospitals and payers can share the risks and the benefits of improving care in the form of reduced costs to payers, both parties will be more motivated to participate in efforts to improve care.