Memo from the Editor

June 3, 2005

Looking at things across the pond

Pay-for-performance programs are getting a lot of attention these days. Private insurers are instituting them, Medicare is talking about them, and organized medicine is fretting over them. Concerns are real. Who sets the quality measures by which performance is judged? Will physicians have input into the performance measures? Will they be evidence-based? Should doctors' pay really be dependent on patient compliance? Will doctors ever stand to make any more money out of a pay-for-performance system?

If the experience coming out of Britain's National Health Service can be translated here, things might not be so bad. According to the May 14 issue of The Economist, primary care physicians seem to be doing very nicely-their average annual income now stands at £90,000 ($170,000), up from £61,000 in 2002-03. A very nice percentage jump indeed.

It seems that the government has decided to alleviate a shortage of primary care physicians by boosting their pay. And much of that pay increase seems to be coming from a pay-for-performance sort of arrangement. In the new contracts that general practitioners got last year, there are some hefty incentives. Physicians can accumulate points for meeting government targets, such as managing appointments better. Each point is worth £75; next year that figure climbs to £120.

Almost certainly there will be an increase in tests. For example, physicians will undoubtedly create better follow-up systems to ensure that all diabetic patients get HbA1c levels read on a regular basis. And there'll probably be more prescriptions written for beta blockers and antihypertensives. But whether such increases translate into better health for patients or a better bottom line for physicians is a big question mark. And the increased expenditures in testing and prescriptions may well trigger a backlash against physicians.

The Economist asked rhetorically why the bump in GP incomes is happening; its answer: "Because the government thinks it should." To date, there are no signs that our government thinks similarly. The first indication might be if a Medicare pay-for-performance program recognizes-and compensates-the true value of the cognitive E&M services primary care physicians provide. We hope it will.