Health Policy

Journal of General Internal Medicine

, Volume 22, Issue 6, pp 872-876

Effects of Paying Physicians Based on their Relative Performance for Quality

  • Gary J. YoungAffiliated withDepartment of Health Policy and Management, Boston University School of Public HealthDepartment of Veterans Affairs, Center for Organization, Leadership and Management Research Email author 
  • , Mark MeterkoAffiliated withDepartment of Health Policy and Management, Boston University School of Public HealthDepartment of Veterans Affairs, Center for Organization, Leadership and Management Research
  • , Howard BeckmanAffiliated withRochester Individual Practice Association
  • , Errol BakerAffiliated withDepartment of Veterans Affairs, Center for Organization, Leadership and Management Research
  • , Bert WhiteAffiliated withDepartment of Health Policy and Management, Boston University School of Public Health
  • , Karen M. SautterAffiliated withDepartment of Health Policy and Management, Boston University School of Public Health
  • , Robert GreeneAffiliated withRochester Individual Practice Association
  • , Kathy CurtinAffiliated withExcellus Health PlansMedVantage, Inc.
  • , Barbara G. BokhourAffiliated withDepartment of Health Policy and Management, Boston University School of Public HealthCenter for Health Quality, Outcomes and Economic Research, Department of Veterans Affairs
    • , Dan BerlowitzAffiliated withDepartment of Health Policy and Management, Boston University School of Public HealthCenter for Health Quality, Outcomes and Economic Research, Department of Veterans Affairs
    • , James F. BurgessJr.Affiliated withDepartment of Health Policy and Management, Boston University School of Public HealthDepartment of Veterans Affairs, Center for Organization, Leadership and Management Research

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Abstract

Background

Studies examining the effectiveness of pay-for-performance programs to improve quality of care primarily have been confined to bonus-type arrangements that reward providers for performance above a predetermined threshold. No studies to date have evaluated programs placing providers at financial risk for performance relative to other participants in the program.

Objective

The objective of the study is to evaluate the impact of an incentive program conferring limited financial risk to primary care physicians.

Participants

There were 334 participating primary care physicians in Rochester, New York.

Design

The design of the study is a retrospective cohort study using pre/post analysis.

Measurements

The measurements adhere to 4 diabetes performance measures between 1999 and 2004.

Results

While absolute performance levels increased across all measures immediately following implementation, there was no difference between the post- and pre-intervention trends indicating that the overall increase in performance was largely a result of secular trends. However, there was evidence of a modest 1-time improvement in physician adherence for eye examination that appeared attributable to the incentive program. For this measure, physicians improved their adherence rate on average by 7 percentage points in the year after implementation of the program.

Conclusions

This study demonstrates a modest effect in improving provider adherence to quality standards for a single measure of diabetes care during the early phase of a pay-for-performance program that placed physicians under limited financial risk. Further research is needed to determine the most effective incentive structures for achieving substantial gains in quality of care.

KEY WORDS

pay-for-performance financial incentives quality of care diabetes