Do incentive plans really work?
By Bob Levoy

Should you adopt an employee incentive plan to increase the number of new patients, patient visits, collections, or sales of ancillary products?

At first glance, it would seem that incentive plans are a one-way street to greater profitability — for both chiropractors and employees. But there are some negative aspects that seem to be ignored by those who encourage initiating incentive plans in practices.

Simply stated, the unfavorable risk is that employees may be inclined to take the narrow or short-term approach rather than the course that provides more long-term benefits. Among the problems reported by practitioners, are the following:

• High-pressure scheduling. Employees under-standably motivated by the opportunity to earn extra money, often become over-eager and begin to high-pressure patients about additional visits, services, and products.

Savvy patients detect and resent such overtures. Others who succumb, may later have “buyer’s remorse,” regret their decision, and not return. Either way, an office that develops a reputation for “high pressure” loses both credibility and patients.

• Inappropriate collection techniques. Employees eager to earn extra dollars for timely collections may put undue pressure on good patients who are slightly late in making payment. Such patients may pay their bills faster (short-term profit) but then not return to the practice (long-term loss).

• ‘Broken’ relationships. When some patients learn (perhaps from a former, disgruntled employee) that they were urged to make an appointment, avail themselves of additional services, or purchase ancillary products because the staff member urging them was paid an incentive to do so, they become distrustful of future recommendations. Even worse, if such stories get included in discussions with friends about the practice, the damage compounds.

• Squelched team spirit. If incentive pay is distributed equally among full-time employees, there is frequently one person who believes she works better or harder and perhaps deserves more of a reward, than others. In such cases, team spirit deteriorates.

• Entitlement mentality. Employees are reluctant to relinquish incentive pay on which they have become dependent, especially if a slow-down such as the closing of a plant, the practice being dropped from a managed care plan or increased competition is through no fault of theirs.

• DC resentments. Conversely, if the opening of a new plant, acquisition of a new managed care contract, or higher fees substantially increase practice revenues, then it’s the chiropractors who are often resentful about the payments due their staffs for results that were clearly not due to their efforts. In one case I encountered, it drove a wedge between the doctor and his staff.

• Manipulated bookkeeping. Then there are the horror stories of flawed incentive plans leading to checks held from one month to the next to assure goals will be met, and appointment books packed so tightly that offices become assembly lines for treating patients.

• Staff conflict. One of the stickiest situations occurs when staff members are paid for bringing new patients into the practice — and two staff members claim they were the ones who referred the same patient. How is that resolved? Have them argue it out? Pay them both? Either way, you lose.

Or, how about a staff member who neglects her duties to concentrate instead, on persuading (educating) patients to make additional appointments? In such cases, shared bonuses may make adversaries among employees.

Reality check: Our market research indicates that employee incentive plans sound good on paper but often create more problems than they solve. In some cases they are later abandoned (leading to additional problems including in one case with which I’m familiar, a staff mutiny).

Alternatives: Fortunately, astute practitioners can do a number of different things to motivate employees other than initiating incentive plans. Basically, these involve addressing employees’ job-related needs, a subject I’ve often addressed in this space. The result will be infinitely superior (and longer-lasting) to any that money alone can buy.

Bob Levoy is a seminar speaker and writer who focuses on the healthcare industry. His most recent book is 201 Secrets of a High Performance Dental Practice Elsevier/Mosby (January, 2005). He can be reached by e-mail at b.levoy@att.net