Effect of incentives on the use of indicated services in managed care (original) (raw)

The Promise and Pitfalls of Explicitly Rewarding Physicians Based on Patient Insurance

Journal of Ambulatory Care Management, 2000

In a large multi-specialty group practice treating approximately equal numbers of health maintenance organization (HMO) and fee-for-service (FFS) patients, we analyzed a natural experiment by the administration to introduce a dual incentive system for physicians. We examine the impact on care when they announced that each physician would be remunerated for HMO care based on a per capita budget, but for FFS care based on billable services. Data were 86,230 episodes for treating patients under age 65 with seven common illnesses. There was no evidence that the intended impact (reducing HMO care) occurred; instead, there were undesired and unintended effects (reduced care for FFS and upset physicians and threats to their corporate culture).

Physician Incentives in Health Maintenance Organizations

Journal of Political Economy, 2004

Managed care organizations rely on incentives that encourage physicians to limit medical expenditures, but little is known about how physicians respond to these incentives. We address this issue by analyzing the physician incentive contracts in use at a health maintenance organization. By combining knowledge of the incentive contracts with internal company records, we examine how medical expenditures vary with the intensity of the incentive to cut costs. Our investigation leads us to a novel explanation for high-powered group incentives: such incentives can improve efficiency in the allocation of resources when the allocation process is based on the professional judgment of multiple agents. Our empirical work indicates that medical expenditures We appreciate helpful comments from the editor and an anonymous referee and from

What do physicians dislike about managed care? Evidence from a choice experiment

The European Journal of Health Economics, 2012

Managed care (MC) imposes restrictions on physician behavior, but also holds promises, especially in terms of cost savings and improvements in treatment quality. This contribution reports on private-practice physicians' willingness to accept (WTA, compensation asked, respectively) for several MC features. In 2011, 1,088 Swiss ambulatory care physicians participated in a discrete choice experiment, which permits putting WTA values on MC attributes. With the exception of shared decision making and up to six quality circle meetings per year, all attributes are associated with non-zero WTA values. Thus, health insurers must be able to achieve substantial savings in order to create sufficient incentives for Swiss physicians to participate voluntarily in MC plans. Keywords Managed care Á Physician preferences Á Willingness-to-accept values Á Discrete choice experiment JEL Classification C93 Á D61 Á I11 Á J22

Provider behavior under prospective reimbursement

Journal of Health Economics, 1986

This paper develops a model in which physicians choose the level of services to be provided to their patients. We show that if physicians undervalue benelits to patients relative to hospital profits, prospective payment, a system in which hospitals receive a payment dependent on the diagnosis-related group within which a patient falls, can lead to too few services being provided. In contrast, a 'cost-based' reimbursement system is shown to result in too many services being provided. Competition between hospitals for physicians will tend to augment both of these problems. We also examine a mixed reimbursement system, in which hosp%l reimbursements are paid partly prospectively and partly cost-based. This system is shown under a variety of circumstances to be superior to the other two reimbursement systems by improving the incentives for the efficient level of services, reducing incentives to unnecessarily admit or reclassify patients, and reducing risk to providers.

Creating a parsimonious typology of physician financial incentives

Health Services and Outcomes Research Methodology, 2009

In order to create an empirically derived parsimonious typology of physician financial incentives that will be useful for future research, we used data from the nationally representative 2004-2005 Community Tracking Study Physician Survey (N = 6,628). Linear regression analyses informed by economic theory were used to identify the combinations of incentives associated with an overall financial incentive to expand services to individual patients. The approach was validated using two nonparametric methods (CART analysis and data mining techniques) and by examining the relationship between the resulting typology and other measures of physician behavior including hours worked, visit volume, and specialty-adjusted income. Of the 6,628 physicians surveyed, approximately 25% (1,605) reported an overall incentive to increase services and 75% (5,023) reported

Physician-Targeted Financial Incentives and Primary Care Physicians' Self-Reported Ability to Provide High-Quality Primary Care

Journal of Primary Care & Community Health, 2013

Physician-driven transformation of health care delivery is a key pillar of the 2010 health care reforms. 1,2 The Affordable Care Act seeks to improve health care quality, access, and equity while lowering costs through the effective deployment of primary care. It is critical to strengthen the role of primary care physicians (PCPs), majority of who are employed in group practice settings. Salaried PCPs' practice behaviors may differ from those of solo physicians/ practice owners because the former are not directly affected by clinic-level financial incentives such as pay for performance, and, therefore, may be more concerned about delivering high-quality care. 3 This study examines salaried PCPs' self-reported ability to provide high-quality care under individual PCP-targeted financial incentives. Financial Incentives in Primary Care Financial incentives targeting physicians are widely used 4 with varying effectiveness documented in primary care settings. One study reported improvements in several patient outcomes and a reversal of the achieved improvements on withdrawing the incentive. 5 Other studies report marginal to insignificant impacts of financial incentives on immunization rates, 6-8 tobacco cessation, 9,10 cancer screening services, 11 and patients' subjective experience of care quality. 12 A meta-analysis reported a positive effect of financial incentives among both solo physicians and group practices. 13 Many factors may drive the contradictory observations noted above, notably the following: depth of practice behavior change being targeted (single outcome focused incentives vs incentives requiring pervasive 462036J PCXXX10.