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Managed care plans have developed complex and varied methods of contracting for physicians’ services. Consumer advocates fear that some of these incentives may negatively impact the types of services patients receive.
Researchers recently surveyed more than 1,500 physicians under the age of 40 who had been in practice for at least two years but not more than nine years, to determine the self-reported impact of the overall influence of their contractual/compensation arrangements on the volume of services they provide to patients. The following factors were significantly associated with an increased likelihood of physicians reporting an incentive to decrease services:
Physicians who were compensated on a fee-for-service basis or receiving a salary with incentive or bonus provisions were more likely to report an incentive to increase services to patients. However, researchers found that physicians’ overall methods of compensation had a relatively small impact on their perceived financial incentives compared to other factors. The next step, say researchers, is to evaluate how physicians’ perceptions of their financial incentives affect their behavior and care delivered to patients.
[See: Mitchell JM, Hadley J, Sulmasy DP, Bloche JG. Measuring the effects of managed care on physicians’ perceptions of their personal financial incentives. Inquiry 2000; 37:134-145.]
Previous studies indicate that health maintenance organizations (HMOs) tend to attract healthier beneficiaries who tend to use fewer health services than patients attracted to fee-for-service plans. Naturally, HMOs benefit financially from this selection bias. However, a recent review of articles published after 1993 concludes that not all HMOs profit from selection bias. Researchers found that healthier patients are still more likely to join HMOs offered by Medicare and Medicaid programs, but not HMOs offered in the workplace. No selection bias was found in the employer-based insurance market so selection bias in the private sector does not result in overpayment.
Medicare HMOs attract healthier beneficiaries. However, Medicare rates were recently adjusted to include a health-based measure calculated using inpatient data. Medicare payments to HMOs were between 6% and 7% too high before the current diagnosis-based risk adjustment system that reduced payments by 7%. Researchers note that because most states are moving toward mandatory Medicaid HMO programs, concern about the impact of selection bias on the appropriateness of Medicaid HMO payments is diminishing.
[See:Hellinger FJ, Wong HS. Selection bias in HMOs: A review of the evidence. Medical Care Research and Review 2000; 57(4):405-439.]