The Performance-related Compensation System in Health Care System

Abstract

Recently, in Japan, the performance-related compensation system is in widespread use in health care management. Individuals who devote professional attention to health care services have relatively strong intrinsic motivation. Therefore, an introduction of performance-related compensation system to medical organization likely discourages them. In this paper, we analyze a nature of performance-related compensation system from a viewpoint of health care management. In particular, we consider individuals’ preference types as follows: selfish preference treated in standard economics, equity-oriented preference, input-oriented preference, and output-oriented preference.Then, we show a possibility such that an introduction of performance-related compensation system decreases efficiency. And then, we investigate a way of performance-related compensation system in health care management.