Home From The Editor The pros and cons of physician incentives

The pros and cons of physician incentives

February 2013

Published in the February 2013 issue of Today’s Hospitalist

What do you think of financial incentives to improve physician performance? You may not be thrilled by the prospect of having your pay affected by measures that can seem arbitrary. But in the world we live in, incentive-based pay for both hospitals and physicians is quickly becoming a fact of life.

Several stories in this month’s issue look at the effect that incentive-based pay is having on hospitalists. As our Poll points out, our annual surveys have found that the percentage of income that hospitalists receive from bonuses and incentives has nearly doubled in the last four years. Interestingly, survey data also indicate that most hospitalists don’t like the idea of having incentives tied to group performance, but instead prefer to be rewarded for their own personal efforts.

That may be a problem, because many incentives being phased in by insurers like Medicare focus on the performance of groups, not individual physicians. One article takes a look at how Medicare is using incentives to drive performance “and cut payments for some hospitals. The article is an excellent primer on financial incentives affecting health care reimbursement.

Not all the news about incentive-based pay in this issue is gloomy. In this month’s What Works, we look at one California hospitalist group that has found a way to drastically reduce readmissions. The group works with an independent physician association that receives a capitated amount of money for every patient in its panel, so fewer readmissions means saving money. But the hospitalist group ” which staffs a post-discharge clinic “is also greatly improving the quality of patient care.

While capitation is fairly unusual outside of California, Medicare and other payers are forcing hospitals to take more risk for patients. It may not be too long before hospitals throughout the rest of the country start learning to adapt to “and even embrace “an even broader notion of incentive-based pay.

edoyleEdward Doyle
Editor & Publisher