While offering physicians bonuses for hitting quality benchmarks is popular, the incentive programs may not be worth the money.
Linking financial rewards to cost-effective management of patient care or reducing adverse outcomes has not produced the desired results, recent studies show. When it comes to physician pay, some experts are asking if healthcare organizations are moving in the wrong direction.
“The programs are often less effective than the designers hoped for,” said Jessica Greene, associate dean for research at George Washington University. She conducted two studies of an ambitious physician incentive program at Minnesota-based Fairview Health Services. “There is still so much we don't know about how to design effective pay-for-performance programs.”
Behavioral economists and healthcare quality and management experts are urging provider organizations to take a second look at their payment models. Complex compensation designs, poor alignment of goals and lack of clearly defined, actionable measures can lead to failed efforts and unintended consequences, they say. Poorly aligned monetary motivations can even lead to difficulties with staff recruitment or retention and lead to over-focusing on one specific issue at the peril of other, more important ones.
Hospital and physician group leaders long have cited the difficulty of crafting physician payment models that encourage quality processes and outcomes while maintaining the incentive for high productivity. Experts are concerned that any new Medicare value-based system for paying doctors, which must be developed under recent legislation, will run into those same challenges, given the fledgling state of measuring the performance of individual physicians.
“The things that really matter in terms of medical quality are very difficult to measure,” said Dr. Michael Kirsch, a Cleveland-based gastroenterologist and author of a blog called MD Whistleblower. Value-based pay can drive healthy competition, but reliance on metrics that are easy to measure but don't ultimately boost outcomes is “a clumsy response to fee-for-service.”
The science of measuring quality performance in healthcare is still in its infancy. Current measures are limited, and critics say linking them to compensation might be premature. Improvements seen on easily tracked process measures such as checklist use or giving discharge instructions may not lead to improvements in patient outcomes such as lower mortality and lower readmission rates.
About 40% of U.S. healthcare providers had some type of incentive linked to pay in 2013, and within that group an average of more than 4% of total compensation was linked specifically to quality metrics, according to the MGMA. In the coming weeks, the group is expected to release data from its latest physician compensation survey, including more than 70,000 providers and more than 4,100 physician groups.