EMS Insider, Expert Advice

Alignment of Incentives


A key principle in EMS system design is creating incentives that align the needs of patients and the community with what the ambulance services, medical first response agencies and 9-1-1 communications centers can provide. Simply put, it’s implementing positive consequences when the various organizations meet expectations and negative consequences when they do not.


At a high level, state and provincial laws and regulations create these incentives. Meeting patient and community needs are the basis of EMS laws and regulations. Non-compliance results in negative consequences. High levels of compliance may result in positive recognition or less frequent reviews by the state or provincial regulatory agency. This creates an alignment of incentives. Good things happen when EMS providers meet the needs of patients and the community, and bad things happen when they do not.


Accountability & penalties


Local units of government, including local EMS regulatory agencies and medical oversight providers, can do the same. EMS performance contracts between local units of government and private ambulance companies commonly establish standards for response times, equipment, staffing, training and data reporting. Non-compliance can result in fines. Chronic non-compliance can result in loss of contract and forfeit of a performance bond that funds the transition to a new contractor. High levels of compliance can have positive consequences such as extension of the current contract and waiver of fines for minor variances exceeding the response time standards.


In my September column for EMS Insider ,1 I noted that current performance-based ambulance contracts tend to focus accountability and penalties on compliance to response time interval standards. It seems that response time performance has become a surrogate measure of clinical quality and patient satisfaction. I have suggested that clinical quality and patient satisfaction be measured directly and become the more dominant accountabilities in performance contracts. This could be done by creating standards for clinical performance and satisfaction and then holding contractors accountable for meeting those standards.


Political leverage


That approach may be fine for aligning the interests of private ambulance services operating under performance contracts with the needs of patients and the community. But how do we establish alignments between governmental EMS agencies and the needs of patients and the communities they serve? It might not make sense for a regulatory agency in a governmental unit to impose a fine on a government-operated EMS service. That’s just moving money from one pocket to the other within the public coffers. Extending a governmental unit’s contract to be an EMS service provider is usually a forgone conclusion. So how else might we create alignments of incentives? How else might we reward high levels of performance and create negative consequences for failure to meet performance standards?


Political capital is a currency with strong influence on how government agencies operate and make decisions. It is spent when an agency seeks support for its proposed budget, to be spared from budget cuts, to retain its managers after an untoward event and when seeking support for a new initiative. Political capital is earned when the agency improves its reputation, gains public and media support, gains employee/union support and gains support from other appointed and elected government officials.


Similar to the financial incentives and penalties applied to private ambulance contractors, alignments of incentives for government EMS providers may be crafted by creating mechanisms that add or subtract from their political capital.


The first step is setting meaningful performance standards. As discussed earlier, current science suggests that good patient outcomes are less associated with short response times and more associated with optimizing clinical processes (e.g., increasing chest compression fractions, reducing false positives and negatives for STEMI alerts, getting stroke scores and then making early hospital notifications when stroke alert criteria are met).


A second step is to make service commitments. Using language similar to private sector performance contracts, articulate what services are provided, the standards to be adhered to and mechanisms by which that agency will be held accountable for meeting those standards. The service commitments may be made between departments within units of government. For example, service agreements can be established between the 9-1-1 communications centers, medical first response agencies, ambulance services, hospitals and even the EMS regulatory agency. They agree to hold each accountable for their respective parts of the EMS system.


Similar service commitments can be made between neighboring units of government, particularly with regard to giving and receiving mutual aid and the quality of service that each should expect to give and receive. This can be particularly important in areas where there are a lot of cities in the same metropolitan area with significant interdependencies and sharing of resources (e.g., hazmat, tactical, specialty rescue units).


When a government ambulance service, medical first response agency or 9-1-1 communications center simply meets the standards, there might not be any political capital gained or lost. They did what was minimally required and expected. However, when the minimum standards are exceeded, there should be a proportionate reward in the level of positive recognition, which drives the amount of gain in political capital. Conversely, if the government EMS provider failed to meet the standards, the level of negative recognition drives the amount of political capital lost.


Identifying mechanisms


The EMS system design for government EMS providers should create not only the performance standards, but the mechanisms for variable positive and negative recognition, which drives the consequential gains and losses of political capital. Senior government officials need to recognize the utility of such a system to help move the government-operated EMS system in a net positive direction. This should trump what a senior government official might perceive as a threat to their own political capital by having anything negative said about an agency for which they have ultimate stewardship. That can be offset by their own gain in political capital by demonstrating transparency and accountability in how their unit of government serves the citizens’ interests.


There are many potential mechanisms for variable positive and negative recognition. One of the most basic is public reporting of performance. The level of impact on political capital will be proportionate the level of visibility. Burying a performance report four layers down inside a government EMS agency’s section of the city or county website will make it virtually invisible and have no impact on positive or negative political capital. In contrast, putting the performance report at the top page of the agency’s website and then sending links with performance summaries—coupled with sending out the reports and press releases to elected officials, major media outlets, hospital emergency departments, other local EMS providers, community groups and other key stakeholders—will give the same scorecard the significant power to add or subtract from the agency’s political capital.


Oh, and by the way, political capital mechanisms can make sense for inclusion in the performance contracts of private EMS service providers as well.