Quality Indicators Most Common in Primary Care Setting
Physician Pay Still Mainly Productivity-Based
By Sheri Porter
1/10/2007
Physician compensation programs based on quality are on the rise, but productivity incentives still dominate physician compensation, concluded a national study released Jan. 4 by the Center for Studying Health System Change, or HSC.
The study, "Physician Financial Incentives: Use of Quality Incentives Inches Up, but Productivity Still Dominates," makes conclusions based on survey responses from more than 6,600 physicians. Results from the 2004-05 study show that compensation based on individual productivity affected about 70 percent of physicians. Only about 20 percent of all physicians reported that quality measures were taken into account in determining their compensation, up from 17.6 percent in a similar 2000-01 survey.
Notably, more than 30 percent of reporting primary care physicians -- including family physicians and internists -- said quality was a compensation factor in their practice while only about 13 percent of surgical specialists said quality was a factor. The study points out that quality indicators are more common in primary care and for treatment of chronic conditions, which often occurs in a primary care setting.
The study also notes that physicians in large group practices, including those in hospital, medical school or other institutional practices, are more likely than physicians in small or medium-sized group practices to receive payment based at least in part on quality. With an increasing number of physicians moving to those larger practice settings, the proportion of physicians likely to be compensated based on quality indicators will continue to grow, according to the study.
As evidence of the shift in physician practice choices, the study reports that
Notably, more than 30 percent of reporting primary care physicians -- including family physicians and internists -- said quality was a compensation factor in their practice while only about 13 percent of surgical specialists said quality was a factor. The study points out that quality indicators are more common in primary care and for treatment of chronic conditions, which often occurs in a primary care setting.
The study also notes that physicians in large group practices, including those in hospital, medical school or other institutional practices, are more likely than physicians in small or medium-sized group practices to receive payment based at least in part on quality. With an increasing number of physicians moving to those larger practice settings, the proportion of physicians likely to be compensated based on quality indicators will continue to grow, according to the study.
As evidence of the shift in physician practice choices, the study reports that
- the number of physicians working in practices with 10 or more physicians rose to 19.4 percent in 2004-05, up from 14.7 percent in 2000-01; and
- the number of solo, self-employed physicians steadily declined from about 30 percent of patient-care physicians in 1996-97 to about 23 percent in 2004-05.
According to a Jan. 4 HSC press release about the study, the survey did not include full owners of solo practices because their compensation is based principally on their own productivity.
Bruce Bagley, M.D., AAFP's medical director for quality improvement, said the study results were not surprising, but he noted that the Academy's focus is on the future.
"This is nice information, but it's old news," said Bagley. "We have an obligation to our members to get them ready for the likely future. It would be a mistake for family physicians reading this to say, 'I don't have to worry about quality measurements for a while; I'll go back to working my fee-for-service incentives.'"
Bagley said predictions call for about 30 percent of physician compensation to be quality-based within the next five years. "Money that now goes to fee-for-service payments will shift, and increasingly, physician payment will be conditional on quality reporting, quality performance or both," he said.
The landscape is rapidly changing, added Bagley. "As soon as six months from now, members need to have mechanisms in place to gather and report clinical data to enable them to receive a 1.5 percent incentive payment on Medicare billings," he said, referring to Medicare payment legislation signed into law by President Bush on Dec. 20. The Medicare incentives take effect in July.
Bruce Bagley, M.D., AAFP's medical director for quality improvement, said the study results were not surprising, but he noted that the Academy's focus is on the future.
"This is nice information, but it's old news," said Bagley. "We have an obligation to our members to get them ready for the likely future. It would be a mistake for family physicians reading this to say, 'I don't have to worry about quality measurements for a while; I'll go back to working my fee-for-service incentives.'"
Bagley said predictions call for about 30 percent of physician compensation to be quality-based within the next five years. "Money that now goes to fee-for-service payments will shift, and increasingly, physician payment will be conditional on quality reporting, quality performance or both," he said.
The landscape is rapidly changing, added Bagley. "As soon as six months from now, members need to have mechanisms in place to gather and report clinical data to enable them to receive a 1.5 percent incentive payment on Medicare billings," he said, referring to Medicare payment legislation signed into law by President Bush on Dec. 20. The Medicare incentives take effect in July.
