WASHINGTON – A study released Jan. 4 by the Center for Studying Health System Change shows that physicians are still predominantly paid for productivity rather than quality.
The study, based on HSC’s most recent nationwide physician survey, shows that seven out of 10 doctors are paid according to productivity, while about one in five doctors are paid based on quality of care.
“Despite the recent interest in pay-for-performance, quality-based physician compensation has been around for a long time,” said James Reschovsky, HSC’s senior researcher and co-author of the study. “However, incentives tied to productivity clearly continue to play a much more important role than quality measures.”
The study comes on the heels of a federal push to promote pay-for-performance in healthcare. Congress passed a measure in December that will include a 1.5 percent pay increase for physicians who voluntarily submit data to the Centers for Medicare & Medicaid Services on applicable quality measures. In addition, Department of Health and Human Services Secretary Michael Leavitt announced Dec. 20 that more than 100 companies have pledged to participate in the Bush Administration’s plan to promote “value-driven” healthcare, making quality of care transparent to the consumer. HHS projects that 60 percent of the healthcare industry will be on board to advance the president’s plan by the spring of 2008.
According to HSC’s president, Paul Ginsburg, the study shows that heavy reliance on productivity-based compensation for physicians is a reflection of the current fee-for-service reimbursement system used by payers, and is likely responsible for the higher cost of care.
Physicians appear to support a productivity payment model, the study showed. Of the physicians paid for productivity, 75 percent viewed productivity as the most important basis for their
compensation. By contrast, 44 percent of physicians paid under a pay-for-performance model viewed P4P as very important to their compensation.
The HSC study was based on a survey of 6,600 physicians. Full owners of solo practices were not asked about financial incentives and are not included in this analysis because their compensation is based principally on their own productivity, HSC said.
The study also concluded that:
n Nearly all physicians receiving quality incentives are also compensated for productivity.
n The number of doctors receiving pay-for-performance incentives rose nearly 3 percent, from 17.6 percent in 2000-01 to 20.2 percent in 2004-05.
n Physicians in larger group practices and hospitals, medical schools or other institutional practices are more likely to be paid for performance than physicians in small and medium-sized group practices.
n Quality-related compensation is more common among primary care physicians than specialists.