Governments and regulators influence the performance of health care organizations and practitioners primarily through positive and negative financial incentives, regulatory constraints on their licenses to practice, and support of performance-improvement activities through education, research, and measurement programs. The financial approaches aim to motivate change in the way organizations and practitioners configure their systems and deliver care, under the assumption that once they’re motivated to seek surplus or avoid sanction, they’ll be willing and able to make local operational changes to reduce cost and improve safety, patient experience, and outcomes. Unfortunately, experience shows that although a changed market may be a helpful precondition to local performance improvement, it hardly guarantees effective operational change.

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