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Better quality will equal better pay for physicians


Tying doctor's pay to the quality of the care rendered is called “incentive alignment,” and it is critical to achieving value and to properly balance healthcare’s cost, quality and access.

Editor’s Note: Welcome to Medical Economics' blog section which features contributions from members of the medical community. These blogs are an opportunity for bloggers to engage with readers about a topic that is top of mind, whether it is practice management, experiences with patients, the industry, medicine in general, or healthcare reform. The series continues with this blog by Jeffrey Gene Kaplan, MD, MS, a senior pediatrician and retired physician executive. The views expressed in these blogs are those of their respective contributors and do not represent the views of Medical Economics or UBM Medica. 


Dr. KaplanI ended my last blog on an optimistic recommendation-”10 Steps That Reduce Poor Quality and Unjustified Care Costs.”

Tying doctor's pay to the quality of the care rendered is called “incentive alignment,” and it is critical to achieving value and to properly balance healthcare’s cost, quality and access.


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To elaborate on the quality aspect, a January 11, 2013 NY Times piece: “New York Ties Doctors' Pay to Quality of Care” lists 13 performance indicators for what used to be called continuous quality improvement (CQI) or total quality management (TQM) under managed care. Examples:

·      How well do patients feel their doctors are communicating?

·      How many patients with heart failure and/or pneumonia are readmitted to the hospital within a month of admission?

·      How quickly do ER/ED patients go from triage there to a bed on the floor? Who is responsible for delays, if any?

·      Are doctors getting to the operating room on time?

·      How quickly are patients being discharged from the hospital?


Next: Expanding indicators further


The doctors’ union that negotiates with New York City’s Health and Hospitals Corporation proposed expanding those 13 indicators to 20 to include:

·      Giving doctors bonuses for attending community meetings, giving talks, providing leadership.

·      Getting special training during work hours.

·      Screening patients for obesity, nutritional intake and exercise or the lack, thereof.

·      Counseling to get patients or their families to stop smoking and/or secondhand smoke.


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Also proposed was, “excluding some patients from incentives aimed at reducing the time patients spend in the hospital” such as:

·      Developmentally disabled patients

·      Homeless people and those who have an unsatisfactory place to go

But beware, such indicators can be gamed and doctors can profile and select patients, referring away the sickest.

Cost to Value Ratios Shows the U.S. Does Relatively Poorly

The United States ranks last compared to six other industrialized countries on the cost to value ratio of care. That is, we are behind Britain, Canada, Germany, the Netherlands, Australia and New Zealand.

Next: How far have we really come?


America spends twice as much on healthcare compared to other developed countries, but gets less healthcare quality, efficiency, and equity, according to “Mirror, Mirror on the Wall: How the Performance of the U.S. Health Care System Compares Internationally.” This still- relevant report, made available June 23, 2010 by the Commonwealth Fund, looks to the Affordable Care Act, passed acrimoniously in the U.S., to substantively improve the cost and quality of our healthcare. 


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Note: it is now clear that improving coverage improves access, adherence to treatment and monitoring as well as reduces out-of-pocket expenditures. But, we lacked proof until recently.

How far have we come?  A few years ago I e-mailed Karen Davis, PhD, now retired from the Commonwealth Fund and coauthor of the report, to discuss the geo-political disparities pertaining to "value" and benefit realized in various healthcare systems.  I asked her, what about America’s performance in healthcare, particularly in terms of incentives as a means to quality and value improvement, is particularly troubling? Can you measure quality fairly?

The Commonwealth Fund report stated that "significant payment and system reform provisions in the Patient Protection and Affordable Care Act will begin to realign incentives within the health care system and reduce cost growth.” I asked Davis how, exactly, in the ideal, organized healthcare system can or will incentives be realigned?

I also asked her whether, knowing what we do from the balloon analogy-If there’s evidence that squeezing or applying cost pressures  will have a net positive benefit and whether such efforts could be durable.

Next: Clearly we're on the same page


Here is what she wrote in response:

Dr. Kaplan,

The Cutler-Davis study you mentioned refers to several specific payment and system reform provisions in the Affordable Care Act that change financial incentives within the health system to reward quality and value rather than volume. These include higher reimbursement for preventive care services and patient-centered primary care; bundled payment for hospital, physician, and other services provided for a single episode of care; shared savings or capitation payments for accountable provider groups that assume responsibility for the continuum of a patient’s care; and pay-for-performance incentives for Medicare providers….We recommend that payers move away from fee-for-service toward bundled payment systems that reward coordinated, high-value care. In addition, we recommend expanding pay-for-performance programs to reward high-quality, patient-centered care.

Clearly, we're on the same page....Are you?

Please comment; we’d love to hear from you.


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