Effect of Financial Incentives on Improvement in Medical Quality
Effect of Financial Incentives on Improvement in Medical Quality
Purpose: The efficacy of rewarding physicians financially for preventive services is unproven. The objective of this study was to evaluate the effect of a physician pay-for-performance program similar to the Medicare Physician Quality Reporting Initiative program on quality of preventive care in a network of community health centers.
Methods: A retrospective review of administrative data was done to evaluate a natural quasi-experiment in a network of publicly funded primary care clinics. Physicians in 6 of 11 clinics were given a financial incentive twice the size of the current Centers for Medicare and Medicaid Services' incentive for achieving group targets in preventive care that included cervical cancer screening, mammography, and pediatric immunization. They also received productivity incentives. Six years of performance indicators were compared between incentivized and nonincentivized clinics. We also surveyed the incentivized clinicians about their perception of the incentive program.
Results: Although some performance indicators improved for all measures and all clinics, there were no clinically significant differences between clinics that had incentives and those that did not. A linear trend test approached conventional significance levels for Papanicolaou smears (P = .08) but was of very modest magnitude compared with observed nonlinear variations; there was no suggestion of a linear trend for mammography or pediatric immunizations. The survey revealed that most physicians felt the incentives were not very effective in improving quality of care.
Conclusion: We found no evidence for a clinically significant effect of financial incentives on performance of preventive care in these community health centers. Based on our findings and others, we believe there is great need for more research with strong research designs to determine the effects, both positive and negative, of financial incentives on clinical quality indicators in primary care.
A variety of strategies have been used to improve the quality of health care services delivered. Financial incentives based on performance have a long history of use in industry to increase productivity and achieve specific quality improvement targets. Their use in medicine for quality as opposed to financial performance has occurred only recently with the introduction of industrial management methods. Incentives have been used widely in ambulatory medical care to increase visit productivity. Productivity rates are often benchmarked to Medical Group Management Association standards for physicians via use of individual production-based compensation formulae. In recent years, there has been growing interest in applying this methodology to increase performance of physicians in achievement of specific quality targets, most often in preventive care and chronic disease management.
We conducted a retrospective analysis of a natural experiment using financial incentives in a system of safety-net community health centers staffed by 2 medical schools, only one of which used incentives.
Abstract and Introduction
Abstract
Purpose: The efficacy of rewarding physicians financially for preventive services is unproven. The objective of this study was to evaluate the effect of a physician pay-for-performance program similar to the Medicare Physician Quality Reporting Initiative program on quality of preventive care in a network of community health centers.
Methods: A retrospective review of administrative data was done to evaluate a natural quasi-experiment in a network of publicly funded primary care clinics. Physicians in 6 of 11 clinics were given a financial incentive twice the size of the current Centers for Medicare and Medicaid Services' incentive for achieving group targets in preventive care that included cervical cancer screening, mammography, and pediatric immunization. They also received productivity incentives. Six years of performance indicators were compared between incentivized and nonincentivized clinics. We also surveyed the incentivized clinicians about their perception of the incentive program.
Results: Although some performance indicators improved for all measures and all clinics, there were no clinically significant differences between clinics that had incentives and those that did not. A linear trend test approached conventional significance levels for Papanicolaou smears (P = .08) but was of very modest magnitude compared with observed nonlinear variations; there was no suggestion of a linear trend for mammography or pediatric immunizations. The survey revealed that most physicians felt the incentives were not very effective in improving quality of care.
Conclusion: We found no evidence for a clinically significant effect of financial incentives on performance of preventive care in these community health centers. Based on our findings and others, we believe there is great need for more research with strong research designs to determine the effects, both positive and negative, of financial incentives on clinical quality indicators in primary care.
Introduction
A variety of strategies have been used to improve the quality of health care services delivered. Financial incentives based on performance have a long history of use in industry to increase productivity and achieve specific quality improvement targets. Their use in medicine for quality as opposed to financial performance has occurred only recently with the introduction of industrial management methods. Incentives have been used widely in ambulatory medical care to increase visit productivity. Productivity rates are often benchmarked to Medical Group Management Association standards for physicians via use of individual production-based compensation formulae. In recent years, there has been growing interest in applying this methodology to increase performance of physicians in achievement of specific quality targets, most often in preventive care and chronic disease management.
We conducted a retrospective analysis of a natural experiment using financial incentives in a system of safety-net community health centers staffed by 2 medical schools, only one of which used incentives.