Pay-for-performance incentives for physicians are common

AORN Journal,  April, 2007  

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More than one-third of health maintenance organizations (HMOs) in the United States use pay-for-performance programs in their contracts with hospitals, and nearly 90% of HMOs included these programs as part of their compensation to physicians in 2005, according to a Nov 1, 2006, news release from the Agency for Healthcare Research and Quality. Pay-for-performance arrangements are used by payers to reward physicians and hospitals for adhering to evidence-based practices. They most commonly are associated with HMOs that use primary care providers as gatekeepers to specialty care, use "capitation" arrangements to give primary care physicians set payments each month based on the number of patients in a given health plan, or are themselves rewarded by performance incentives.

Researchers reviewed health plans that offered HMO products in 41 markets across the United States and that had at least 100,000 enrollees. Their sample represented 91% of the US HMO market and 78% of the US metropolitan population. The study revealed that

* of the 242 HMOs surveyed, 52% used pay-for-performance in provider contracts in 2005;

* of the 113 HMOs that used pay-for-performance for physicians, 13% focused on the physician as the unit of payment, one-third were designed to reward only the top-rated physicians or groups, and two-thirds offered a rewards program for attaining a pre-determined performance threshold, with potential physician bonuses generally equaling 5% of payments from the plan;

* nearly two-thirds of the HMOs that require primary care providers to be gatekeepers to specialty care used pay-for-performance compared to 25% of HMOs that do not require gatekeeper physicians;

* nearly all the health plans (ie, 100% capitated, 79% noncapitated) included measures of quality;

* use of information technology and patient satisfaction surveys commonly were used as elements of the physician incentive programs; and

* nearly three-quarters of HMOs that used pay-for-performance in their hospital contracts used measures other than intensive care unit staffing, use of computerized physician order entry systems, and volume standards for high-risk procedures.

The findings were significant because the federal government plans to institute pay-for-performance into the traditional Medicare plan by 2009, according to the researchers.

Pay-For-Performance Incentives Adopted by Half of US HMOs, But Use Depends on Health Plan Type, Physician Payment Arrangements [press release]. Rockville, Md: Agency for Healthcare Research Quality; November 1, 2006.

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