American College of Physicians: Internal Medicine — Doctors for Adults ®


A sampling of quality incentive programs

Copyright 2003 by the American College of Physicians-American Society of Internal Medicine.

While California will soon have the biggest quality incentive programs, it is not alone. Here is an overview of other bonus programs:

  • Hawaii Medical Service Association (HMSA). For five years, HMSA—the state's Blue Cross Blue Shield plan—has had one of the most well-known and successful quality incentive programs for physicians in its preferred provider organization (PPO) network. Analysts say it is the model for the Blue Cross of California PPO incentive program announced last fall.

    According to Richard S. Chung, MD, HMSA's vice president and medical director for care management, the PPO program last year distributed a total of $9.3 million in bonuses to 1,800 physicians in the 2,300-physician network. The average bonus was just over $5,000, while 325 physicians received the minimum bonus of $500 and more than two dozen received bonuses of $13,000 or more.

    The program enjoys physician buy-in, Dr. Chung said, because the plan has been careful to get physician input into performance measures. Every year, HMSA officials meet with different specialty groups who recommend quality indicators to use.

    Gastroenterologists, for example, suggested the following quality measure: using endoscopy or barium enema after an initial diagnosis of diverticulitis. In all, the incentive plan relies on more than 50 quality indicators, some of them specialty-specific.

    "If physicians don't believe we're using good measures and data," Dr. Chung said, "they are more resistant."

    Stressing a team approach to patient care is another key component of the plan's success, he said. "PPOs are very fragmented," he pointed out. The fact that as many as five doctors may be taking care of one patient leads to this key concern: how to assign patient care credit-or penalties.

    "We zero in on the appropriate specialties for a chronic disorder," Dr. Chung explained, "so if a diabetic sees an internist, an ophthalmologist and a cardiologist and none of them got a hemoglobin A1c for the patient, they all get the same score."

    Another factor ensuring strong physician cooperation? With about 650,000 members, the HMSA PPO network insures roughly half the state's population. "Our size," Dr. Chung said, "is a big advantage."

  • Partners Community HealthCare. Partners Community HealthCare in Boston—an integrated health care system affiliated with Harvard Medical School—has five acute care hospitals, along with a physician network of 1,000 primary care physicians and 1,500 community specialists. With that kind of scale, the system is able to take part in several different incentive programs.

    Partners is in the first year of an incentive program with Harvard Pilgrim Health Care, an insurance plan, to see if Partners' physicians can hit agreed-upon targets in managing patients with diabetes and asthma. While Thomas H. Lee, MD, Partners' chief medical officer, won't disclose how much money Harvard Pilgrim is offering, he said it was "much too much for us to ignore."

    Dr. Lee also said he believes physicians nationwide will start seeing more disease-specific incentive programs and that doctors will start focusing more on patient populations to achieve those bonus offers.

    "Once a $10,000 to $30,000 portion of their income is on the line, physicians will start blocking out a half hour of their schedule every day for population management," he said. Very small practices, he acknowledged, may not have the staff and infrastructure necessary to compete for those types of awards.

    Dr. Lee also pointed to another incentive program that General Electric Co. (GE), along with other employers, is rolling out. The GE program will pay quality bonuses directly to physicians who invest in both electronic systems—such as electronic medical record and e-prescribing software—and nonelectronic tools like disease-specific patient registries. (Besides buying $1.4 billion of health care for its employees, GE also sells electronic medical record software, having purchased the former MedicaLogic in 2001.)

    One unique feature of the incentive program, Dr. Lee explained, is that it leaves health plans out of the loop. "Rather than relying on payers and carve-out companies to sift through claims," he said, "these employers want to get rid of layers in the health care system." That "de-layering," as Dr. Lee called it, will reduce delays and inefficiency, and make it easier to find ways to reduce errors.

    But the fact that incentives will be paid directly to physicians opens the way for some heated discussions. Because Partners—like other large organizations—provides the systems that allow its physicians to earn incentives, "there will have to be an internal discussion of, 'OK, we helped you get these rewards, so you've got to give us some,' " he said. "I'm sure that will be a lot of fun."

    Incentive programs have other fallout, particularly because some physicians do better with them than others. "Incentives raise acrimonious issues," Dr. Lee admitted. "Doctors who don't qualify are going to say, 'Are they getting my money?' GE would claim that physicians are being rewarded out of the savings they create—but I don't think anyone will ever be able to say for sure where the money is coming from."

  • Promina Health System. With seven hospitals in Atlanta, Ga., and 1,500 participating physicians, Promina Health System is trying a different approach than giving bonuses. In partnership with Cigna Healthcare of Georgia, the integrated system last year began ranking its physicians on safety and quality indicators—and is dividing them into three different payment tiers based on measurement results.

    "Fifteen percent of the physicians are at base level, 70% are at tier one and another 15% are at tier two," which is the highest, said Robert H. Ryan, MD, Promina's chief medical officer. "It's a bell-shaped curve." Every time a physician provides any service to a Cigna patient, he or she will have that claim paid at a specific payment tier.

    "A failure of the bonus system is that you have to wait 12 months to pay for better quality care," he said. "By that time, you've disconnected the payment from care that went on during the year."

    While Cigna has only "a fairly small piece" of the Atlanta metropolitan market, Dr. Ryan said that Promina is now negotiating with other payers—including Blue Cross Blue Shield of Georgia—to sign on. Dr. Ryan couldn't comment on how physicians were reacting to their tier assignments: Primary care physicians were receiving their notices at press time, while specialists will get theirs this month.

    "They're being measured every six months, so they can move among tiers fairly easily," Dr. Ryan pointed out. "And fewer physicians are saying, 'We don't want anyone looking over our shoulder.' "


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