Physicians are still predominantly paid for productivity rather than quality, a study released Jan. 4 by the Center for Studying Health System Change has shown.
The study, based on HSC's most recent nationwide physician survey shows that 7 out of 10 doctors are paid according to productivity, while about 1 in 5 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 U.S. healthcare. Congress passed a measure last month that will include a 1.5 percent pay increase for physicians who voluntarily submit data to the Centers for Medicare and 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 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 of them 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.
This year's 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.
Additional key findings from the study included:
* Nearly all physicians receiving quality incentives are also compensated for productivity.
* 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.
* About one in four physicians (23.5%) in non-solo practice do not have their compensation tied to any explicit financial incentives.
* Physicians in larger group practices and hospital, medical school or other institutional practices are more likely to be paid for performance than physicians in small and medium-sized group practices.
* Quality-related compensation is more common among primary care physicians than specialists.