Article1998

Primary Care Physician Compensation Method in Medical Groups

Douglas A. Conrad · Charles C. Maynard · Allen D. Cheadle · Scott David Ramsey · Miriam Marcus‐Smith · Howard L. Kirz +8 more

102 citations0/0 files storedJAMA

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Healthcare Policy and Management Primary Care and Health Outcomes Healthcare cost, quality, practices

Abstract

CONTEXT: Growth of at-risk managed care contracts between health plans and medical groups has been well documented, but less is known about the nature of financial incentives within those medical groups or their effects on health care utilization. OBJECTIVE: To test whether utilization and cost of health services per enrollee were influenced independently by the compensation method of the enrollee's primary care physician. DESIGN: Survey of medical groups contracting with selected managed care health plans, linked to 1994 plan enrollment and utilization data for adult enrollees. SETTING: Medical groups, major managed care health plans, and their patients/enrollees in the state of Washington. STUDY PARTICIPANTS: Sixty medical groups in Washington, 865 primary care physicians (internal medicine, pediatrics, family practice, or general practice) from those groups and affiliated with 1 or more of 4 managed care health plans, and 200 931 adult plan enrollees. INTERVENTION: The effect of method of primary care physician's compensation on the utilization and cost of health services was analyzed by weighted least squares and random effects regression. MAIN OUTCOME MEASURES: Total visits, hospital days, and per member per year estimated costs. RESULTS: Compensation method was not significantly (P>.30) related to utilization and cost in any multivariate analyses. Patient age (P<.001), female gender (P<.001), and plan benefit level (P<.001) were significantly positively related to visits, hospital days, and per member per year costs. The primary care physician's age was significantly negatively related (P<.001) to all 3 dependent measures. CONCLUSIONS: Compensation method was not significantly related to use and cost of health services per person. Enrollee, physician, and health plan benefit factors were the prime determinants of utilization and cost of health services.

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References

1987Health insurance and the demand for medical care: evidence from a randomized experiment.1984A Controlled Trial of the Effect of a Prepaid Group Practice on Use of Services 1989How Do Financial Incentives Affect Physicians' Clinical Decisions and the Financial Performance of Health Maintenance Organizations?1992Variations in Resource Utilization Among Medical Specialties and Systems of Care 1995Moral Hazard and Risk Spreading in Partnerships 1990Compensation and Productive Efficiency in Partnerships: Evidence from Medical Groups Practice 1995Variations in Resource Utilization Among Medical Specialties and Systems of Care 1995The Growth of Medical Groups Paid through Capitation in California

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