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The limits of marginal economic incentives in the Medicaid program: concerns and cautions.

In January 1985, New York State implemented legislation that allowed for a 30 percent increase in Medicaid fees for physicians providing primary care services. This was intended to increase their levels of participation. Yet the outcome was not as expected. In upstate New York, the number of physicians participating in Medicaid each month actually declined; in New York City, the monthly rate of increase in participating physicians, which was part of the overall sharp rise in all licensed physicians, underwent a decline. Furthermore, utilization measures suggest that "procedural upgrading" might have become a problem in New York City. These results suggest that a marginal increase in New York State's low Medicaid fees will not have a positive effect on physician participation levels.

Fees, Medical↗

Cost-based reimbursement and prospective payment: reassessing the incentives.

Prospective payment is distinguished from the imposition of a regulatory ceiling on hospital costs. While a regulatory ceiling could potentially be effective in controlling expenditure growth, its success depends upon the political climate. Prospective payment, as a distinct financial policy, offers little cost-containment potential. It is appropriately evaluated in term of its effects on the distribution of risk between providers and third parties and on the trade-off between investment and current consumption.

Cost Control↗

Disclosure of physician incentives: do practices satisfy purposes?

Under legal pressure, discussion has quickly shifted from whether health plans should disclose how they pay their physicians to how, when, and what should be disclosed and by whom. This paper describes health plans' disclosure practices and evaluates their adequacy and likely impact. It begins by explaining how different reasons for disclosure alter the form and content of disclosure, illustrating these approaches with actual examples. The paper concludes with a recommended approach that attempts to layer and stage disclosures so that people have as much information as they want, when they need it.

Attitude to Health↗

U.K. quality incentives.

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Physician Incentive Plans↗

Quality incentives.

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Minnesota↗

Performance incentives.

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Evidence-Based Medicine↗

Using quality incentives to drive physician adoption of health information technology.

Medicare policies could have an important impact on physicians' decisions to use clinical information technology (IT) to better manage patient care. Sheera Rosenfeld and colleagues conclude that Medicare should pay physicians for the costs of adopting IT and assume that future savings to Medicare will justify the investment. The Medicare Payment Advisory Commission (MedPAC) recommended establishing a budget-neutral pay-for-performance program to reward physicians for the outcomes of use, instead of simply helping them purchase a system. This commentary explains why the commission's policy may be more effective.

Humans↗

Hospital tiers in health insurance: balancing consumer choice with financial incentives.

Variations in efficiency and market power are generating wide variations in the prices charged by hospitals to health insurance plans. Insurers are developing new network structures that expose the consumer to some of the cost differences, to encourage but not mandate differential use of the more economical facilities. The three leading designs include hospital "tiers" within a single broad network, multiple-network products, and the replacement of copayments by coinsurance in HMO as well as PPO products. This paper describes the new network designs and evaluates the challenges they face in influencing consumers' behavior, incorporating information on clinical quality, and supporting medical education and uncompensated care.

Consumer Behavior↗

The incentive plan: an approach for modification of physician behavior.

Blue Shield of Massachusetts undertook a one-year study in 1981 to determine if a group of obstetrician/gynecologists could be motivated to reduce average length of stay (ALOS) for normal deliveries, cesarean sections, and hysterectomies. The group decreased ALOS for all three procedures. Additional studies are required to determine what portion of the decrease in ALOS can be attributed to change in physician behavior.

Blue Cross Blue Shield Insurance Plans↗

Physician incentives for academic productivity. An analysis of orthopaedic department compensation strategies.

BACKGROUND: Changes in the health-care industry have led to increasing demand for physician-driven clinical volume. This environment has altered the traditional balance among teaching, research, and service responsibilities for faculty in residency training programs. As economic pressures mount and budgets shrink, academic departments are exploring ways of paying faculty that would help to maintain the global mission of the organization. The purpose of this study was to examine the compensation strategy for faculty in academic orthopaedic surgery departments in the United States with a focus on compensation methods for academic productivity. METHODS: Thirty-one academic orthopaedic surgery residency training programs were recruited for the study. Two methods of data collection were used: (1) a survey was mailed electronically to the program chairpersons or the finance directors, and (2) eight program leaders were interviewed to obtain more in-depth information regarding compensation for academic productivity in their organizations. RESULTS: All thirty-one programs responded to the survey. To compensate faculty for clinical productivity, twenty-two programs used a salary and bonus system, two used salary alone, and the remainder used combined methods. Nineteen departments had a compensation system that included academic productivity, and twelve did not. Of those that compensated for academic work, seven used the chair's decision, six used a point system, one used academic rank alone, and the remainder used a combination of methods. The point systems varied in breadth, focus, and amount of detail. CONCLUSIONS: Most, but not all, departments accounted for academic productivity in their compensation system. Most programs used the chair's discretion to determine academic bonuses, but several departments had developed point systems. There are common themes with regard to this issue, including the importance of the academic mission, the need for clinical revenues, the value of flexibility and transparency, and the importance of culture and leadership.

Culture↗

Financial incentives and gaming in alcohol treatment.

This study looks at the effect of performance-based contracting (PBC) on administrative information misreports in substance abuse treatment in Maine. For about 700 alcohol abuse treatment episodes in the period 1990-1995, we constructed clinician report gaming indicators from two data sets: the Maine Addiction Treatment System (MATS) and medical record abstracts. Gaming, in this study, refers to differences in MATS reports and the medical records for an episode. Under PBC, which was implemented in 1992, a provider's financial reward was positively related to treatment outcomes measured by some reports from MATS. We found that the introduction of PBC increased gaming. The data supported the hypotheses that clinicians overstated patient severity at the beginning of treatment episodes, and understated severity at the end.

Adult↗