Insurance Companies Pay Doctors For Performance

February 16, 2008 by Frank Abbott

Say you’ve just gone to the doctor and you’ve had your annual check-up. Maybe, you’ve had your blood pressure checked and had the once over from the nurse practitioner. Congratulations! Your blood pressure is back down to normal levels. Now, who gets credit for this great achievement? You guessed right! Your doctor will get a bonus for the accomplishment of lowering your blood pressure.

This is a controversial trend that is happening nowadays and more and more insurance are opting for a “pay for performance” plan when negotiating with health care providers. The insurance companies pay health care providers bonuses with certain criteria are met. For example, if your doctor has you undergo certain screenings or if your blood pressure has stabilized, your doctor will receive extra money for meeting those objectives.

The Integrated Health Association (IHA), a group that involved 7 health insurance companies, collaborated on an initiative that doled out more than $54 million in 2005 to medicals groups. This figure is up from $37.5 million in 2004.

Not everyone agrees that paying more to get quality care can work out financially or ethically. Naysayers dispute that paying doctors for patient outcomes is hard to track. Outcomes may be correlated with the physician but may also be attributed to the patient’s health and lifestyle. There is also concern that the funds will be directed to richer areas where patients are more likely to follow doctors’ admonitions.

Those who advocate for the program say that improved quality in health care providing can cut costs by preventing expensive procedures.

With that in mind, how much should insurance companies then pay physicians who reach these benchmarks? The IHA program does not give funds to individual doctors. They give bonuses to medical groups who then decide how to distribute funds. It was suggested that to encourage significant change, physicians needed to be compensated at least 5% of their salary. The IHA program, however, distributed much less than that. Their group paid between 1 - 2%.

IHA isn’t the only group to provide incentives to doctors. In 2006, Congress passed a bill that would pay doctors additional incentives if the doctors reports how often they provided quality care as defined by the federal government. The doctors qualified for a 1.5% bonus in the second half of 2007.

There are some ethical questions to ask. Shouldn’t physicians already have our best interests at heart? Is it wrong to compensate above and beyond salary to do what they should be doing already? Is it worth it if patient outcomes change dramatically? It seems like a lowest common denominator cure for a systemic problem.

About the Author:

Frank Abbott is a freelance writer and artist who has an avid interest in politics and especially health insurance reform. For more information regarding insurance, visithttp://www.nehealthinsurancetrek.com