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Fam Pract Manag. 2007;14(2):19-20

Quality-based compensation may have limited use, suggests study

For nearly 20 percent of physicians in group practice, compensation is based in part on quality of care, a percentage that has changed little over the past decade, according to the Community Tracking Study Physician Survey from the Center for Studying Health System Change.

Quality incentives are most prevalent among family physicians and internists (30 percent), large practices (26 percent) and practices that receive a substantial share of revenue from capitated payments (33 percent).

But while quality-based compensation is fairly common, it isn't correspondingly popular, according to the study. Researchers found that only 9 percent of all physicians, or 44 percent of physicians with quality-based financial incentives, view quality as a “very important” factor in determining compensation.

In contrast, 52 percent of all physicians, or nearly 75 percent of physicians with productivity-based financial incentives, view productivity as a very important compensation factor.

Researchers speculated that quality-based compensation may be limited because of a lack of quality measures that physicians accept as valid. In addition, because many physicians treat relatively small numbers of patients with conditions covered by payers' quality measures, it can be difficult to achieve statistical reliability in measurement.

Health care spending still growing but slowing

U. S. spending on health care totaled nearly $2 trillion in 2005, or $6,697 per person, an increase of 6.9 percent over the previous year, according to a new report from the Centers for Medicare & Medicaid Services Office of the Actuary. While health care spending continues to outpace inflation and wage growth for the average U.S. worker, its growth rate has slowed for three consecutive years and is at its lowest point since 1999.

The report attributes the decline primarily to a slowdown in prescription drug spending, which grew just 5.8 percent in 2005 versus 8.6 percent a year earlier. Prescription drug spending slowed because of decreases in Medicaid spending, greater use of generic drugs, tiered co-payments for prescription drugs and fewer new drugs entering the market, according to the researchers. Slowing growth in health care premiums also contributed to the overall decline.

Spending for physician and clinical services grew 7 percent in 2005, similar to the previous year. However, Medicare spending for physician services grew 9.5 percent, down from 10.4 percent a year earlier. Overall Medicare spending grew 9.3 percent. In comparison, patients' out-of-pocket costs increased 5.8 percent.

The full report is published in the January/February 2007 Health Affairs.

Spending categories2005Growth rate
Total$1.9 trillion6.9%
Hospital care$611.6 billion7.9%
Physician and clinical services$421.2 billion7%
Prescription drugs$200.7 billion5.8%
Nursing homes$121.9 billion6%
Home health care agencies$47.5 billion11.1%

Insurer suspends its physician rating system

Blue Cross and Blue Shield of Texas has agreed to suspend its BlueCompare physician rating system after receiving complaints from the Texas Medical Association (TMA). Upon reviewing the program, which was scheduled to be posted to the insurer's Web site on Jan. 1, 2007, the association found “significant errors in how data are collected, processed and reported.” One point of contention is that the program relies on claims data to evaluate physicians' quality of care.

“You can no more tell from looking at a claim form that good medical care was provided than you can tell from looking at a restaurant bill that good food was served,” TMA President Ladon W. Homer, MD, said.

The TMA also objected to the system's use of blue ribbons to identify doctors who rank in the top 60 percent on its quality measures and gray ribbons to identify those who rank in the bottom 40 percent, those whose data is insufficient to rate and those who practice in specialties not currently measured.

At press time, Blue Cross and the TMA were still in talks regarding changes to the rating system.

Free e-prescribing program offered online

A national coalition of technology and health care companies is offering physicians free access to a Web-base electronic prescribing program. The initiative, called the National e-Prescribing Patient Safety Initiative (NEPSI), is geared mainly toward solo physicians or those practicing in small groups. “NEPSI is an opportunity to overcome the traditional barriers that have kept physicians from using electronic prescribing systems,” Allscripts CEO and Chairman Glen Tullman said.

The online program, eRx NOW, is a stand-alone version of an existing Allscripts e-prescribing program. Any device with a Web browser, including a personal digital assistant or a cell phone, should be able to run the free program. The coalition suggests the average user can learn how to use eRx NOW in 15 minutes.

The coalition's goal is to cut down on medication errors by eliminating illegible handwriting and by checking the patient's prescription for drug interactions, dosage levels and prior adverse reactions. Allscripts acknowledges its hope that the free offer of its program will benefit the company's brand recognition and that physicians “may eventually upgrade to other Allscripts products.”

The companies involved in the project will invest about $100 million over the next five years. In addition to Allscripts, the NEPSI sponsors include Dell, Cisco, Fujitsu, Microsoft, Sprint, Wolters Kluwer Health, Sure-Scripts, Google, Aetna and WellPoint.

Several insurers, including those named above, are planning incentives to encourage physicians to use the e-prescribing product.

Physicians can register to use the NEPSI e-prescribing program at

Report examines ‘better-performing’ groups

If you're looking for ideas to improve your practice, a new report from the Medical Group Management Association (MGMA) might be what you need. The group's 2006 Performance and Practices of Successful Medical Groups report identifies 508 “better-performing” multispecialty practices from more than 1,250 survey respondents and examines what sets them apart.

Groups included in the “better-performing” list excelled in four areas: profitability and cost management; productivity, capacity and staffing; accounts receivable and collections; and patient satisfaction. According to the report, these “better-performing” multispecialty groups posted profits of about $315,000 per full-time equivalent (FTE) physician. Other groups averaged about $273,000 per FTE physician.

In general, the report found that “better-performing” groups are more likely than other medical practices to do the following things:

  • Employ larger support staffs, averaging 5.69 FTE employees per physician vs. 4.76 FTE employees per physician at other groups;

  • Invest in information technology (IT), spending 13 percent more on IT costs per physician than other groups;

  • Be productive, conducting about 3,000 more procedures each year than other groups;

  • Improve cash flow, consistently lowering their gross fee-for-service charges in accounts receivable.

Aetna sets up personal health records for members

Starting this month, 1 million Aetna members can go online to access their health information through a personal health record (PHR). By the second quarter of the year, the health insurer plans to make portable, online PHRs available to its remaining 14 million members.

The “CareEngine powered” PHRs will contain patient information based on medical, pharmacy and lab claims that have been filed with Aetna. Additionally, members will be able to input information such as family history, over-the-counter medications and at-home blood pressure readings.

The CareEngine program, which was developed by Aetna-owned Active-Health Management, will then compare the data in members' PHRs against evidenced-based clinical guidelines. If it determines that a procedure needs to be conducted or treatments need to be altered, the program will alert members and their physicians. Aetna believes the program will improve patient care.

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