Friday, June 30, 2017

Pay for performance the " NEW COKE" lessons to learn from paralysis from analysis


Pay-for-performance has become popular among policy makers and private and public payers, including Medicare and Medicaid. The Affordable Care Act expands the use of pay-for-performance approaches in Medicare in particular and encourages experimentation to identify designs and programs that are most effective.

The typical pay-for-performance program provides a bonus to health care providers if they meet or exceed agreed-upon quality or performance measures, for example, reductions in hemoglobin A1c in diabetic patients. The programs may also reward improvement in performance over time, such as year-to-year decreases in the rate of avoidable hospital readmissions.

Pay-for-performance programs can also impose financial penalties on providers that fail to achieve specified goals or cost savings. For example, the Medicare program no longer pays hospitals to treat patients who acquire certain preventable conditions during their hospital stay, such as pressure sores or urinary tract infections associated with use of catheters.

Thin-slicing

You do not have to pay attention to everything that is happening. We can often make sense of situations based on the “thinnest slice of experience.” On the surface it can seem almost magical however, delve deeper and you will find the logic and rationale.

"There are many interesting stories in the book and I was intrigued with Gladwell’s account of New Coke. I think this story provides an excellent insight into how the best and brightest minds with the best research and fact based analysis can often bamboozle themselves into a most disastrous course of action.
We know the history – The Pepsi Challenge, Pepsi tastes better, Coke responds with New Coke and then kaboom.
  • Pepsi gaining market share
  • The Pepsi Challenge – the majority of tasters preferred Pepsi
  • Additional market research shows a preference for Pepsi – tastes must have changed
  • New Coke under development
  • New Coke – sweeter and more like Pepsi starts to perform better in taste tests
  • Launch New Coke
  • Major crisis launches the return of Classic Coke
In the author’s words, “Coke has gone head to head with Pepsi with a product that taste tests say is inferior, and Coke is still the number one soft drink in the world. … This story is a good illustration of how complicated it is to find out what people really think.”"
Gladwell’s insights:
  • Taste tests don’t tell the real story – there is always a bias for sweetness in a sip. (People knew that.)
  • Drinking a whole bottle or can is a more accurate comparison – sweetness can get overpowering. (People knew that as well.)
  • Home use tests over time will give you better information. (Most people knew that.)
  • The entire principle of a blind taste test was ridiculous – in the real world no one drinks Coca-Cola blind!
  • Pepsi’s success in the blind taste tests never translated to much in the real world.
  • The error was in attributing the loss of market share to the product, as opposed to the good things Pepsi was doing with branding.
  • All of the unconscious associations and emotions we have of the brand, the image and the packaging were lost to “the guys in white lab coats.”
There is so much more in Blink that I appreciate, including unconscious “micro expressions”, the Facial Action Coding System, stereotyping and how that mind view can be altered, why tall men are often perceived as leaders, the downside of rapid cognition, the effect of stress and arousal, the tragic results of collective thinking and how one police officer in a car might just be a better thing.

My thinslice Blnk judgement 
Pay for performance is going to go the new coke way


*

Blink: The Power of Thinking Without Thinking by Malcolm Gladwell



No comments: