Magazine article Medical Economics

BILLIONS WASTED on Incentive Payments That Fail to Motivate Physicians

Magazine article Medical Economics

BILLIONS WASTED on Incentive Payments That Fail to Motivate Physicians

Article excerpt

Payers spend about $20 billion annually on incentive payments, but a recent survey of more than 4,500 healthcare providers concludes that pay-forperformance programs are largely ineffective and do little to improve the quality of care.

Nearly 70% of primary care physicians (PCPs) surveyed by the Evanston, Illinoisbased consulting firm ZS Associates in its 2012 Incentives for Health Professionals Report say that incentive payments are good, and 56% expect to receive more bonuses in the future. Roughly one-fourth of the PCPs polled report earned performance bonuses, compared with 22% of specialists, 18% of midlevel providers, and 7% of medical assistants.

Even though up to 85% of physicians and nurses could receive incentive payments, the report says that nearly 75% "were either unaware of the rewards or unable to distinguish incentive payouts from base pay."

"Payer incentives are relatively small and fail to 'trickle down' to the individuals making the actual decisions that affect outcomes," the report says.

Nearly 30% of PCPs surveyed say that incentive payments are not motivating, and more than half admitted to being unsatisfied or neutral concerning their current incentive plans.

Relative value units - a standardized amount assigned to each procedure or encounter- are used as an incentive payment metric for 72% of PCPs; for 30% of PCPs, they are the only metric used to calculate incentive payments. PCPs polled said that their incentives were based on:

* volume of medical services provided,

* customer or patient satisfaction,

* quality of care,

* effectiveness of care delivered, and

* cost control or cost reduction. …

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