It’s one of the grand ideas that is supposed to revolutionize U.S. health care: reward doctors who keep patients well with fewer tests, procedures and appointments.
That might register as barely profound to most of us, but it is a radical shift in the incentives that doctors and hospitals face. Under the Affordable Care Act, some doctor’s groups and hospitals have banded together in accountable care organizations to treat Medicare patients under this new philosophy. If the patient stays healthier with fewer appointments, the providers get a share of the cost savings.
But a new study published last week in the Annals of Family Medicine examined how doctors have been making money in this brave new world vs. the status quo, and found pretty negligible differences.
Their first finding was a mess of inconsistencies in the way doctors are paid — a combination of salary, money from providing services, and quality. The break-down in pay for the 632 physician practices surveyed varied widely, regardless of whether the doctors worked in an accountable care organization or a more traditional practice. Second, the amount of income tied to the quality of the care they delivered was small — even if they worked at an accountable care organization that was working to drive down costs by improving patient care.
“I think it points to a potential problem: that these incentives aren’t getting translated to individual physicians,” said Andrew Ryan, a health economist at the University of Michigan School of Public Health who led the study.
Doctors who worked at an accountable care organizations had slightly more of their incomes tied to quality — two percentage points more than doctors in traditional practices.
“So we’re expecting big things from them?” Ryan said. “I think it’s unreasonable to think that a two percentage point difference is really going to move the needle.”
Ryan said he wasn’t sure what the solution was, but the new analysis shows that, even within accountable care organizations, only a tiny amount of the pay of doctors was linked to the quality of their care.
Lowering health care costs also depends on more than just physicians’ decisions, such as whether the organization uses electronic medical records and nurses to coordinate and oversee care for patients that have chronic illnesses.
Mark Friedberg, a senior natural scientist at RAND, said that the new study confirms on a larger scale what other work has suggested, that very few organizations are directly passing on financial incentives to physicians. That’s because patient trajectories are “noisy,” meaning that for any given patient they could swing up and down from year to year, from needing lots of medical care to needing virtually nothing.
“You’re going to be penalizing and rewarding physicians almost entirely due to noise,” Friedberg said. His own research suggests that instead, physicians are given “soft” incentives — such as inserting quality measures into a job evaluation rather than tying them to pay.
But Friedberg said that part of the problem is that the doctors in these organizations don’t just see Medicare patients — they also take care of people whose insurance reimbursements follow a more traditional structure, which makes it difficult for changes in one payment model to have wide-ranging effects in how care is delivered.
That, combined with the study’s broader finding — that there’s variability in how primary care doctors are paid in the first place — shows just how challenging it will be to change how medicine is practiced.
“I think it points to the general confusion,” Ryan said. “It’s 2015, and there’s such incredible variation in this. It’s just frankly surprising that we haven’t coalesced around more standard ways that practices compensate physicians.”
