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Health Care Costs and Financing

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Researchers examine physicians' perceptions of health plan incentives to limit services

As managed care plans develop increasingly complex and varied methods of contracting for physicians' services, it becomes more and more important to understand whether and how these contracting methods influence the quantity, quality, and/or mix of services that physicians provide. Despite the need for such information, research on the impact of contractual arrangements on physicians' behavior is hampered by several factors. These include the increasing variety of insurance products, physicians' affiliations with multiple insurance plans, and the difficulty of measuring these arrangements at the individual physician-patient levels.

A recent study supported by the Agency for Healthcare Research and Quality (HS09196) examined the effects of contractual arrangements on the provision of health care services by using physicians' self-reported perceptions of the overall influence of their contractual/compensation arrangements on the volume of services they provide to patients. The study was conducted by researchers at Georgetown University and New York Medical College using data from a recent national survey of more than 1,500 physicians under the age of 40 who had been in practice for at least 2 years but not more than 9 years.

The researchers found that the following factors were significantly associated with an increased likelihood of reporting an incentive to decrease services: a gatekeeper arrangement with financial incentives; perceived high risk of exclusion of physicians with high costs from the plan; the perception that referrals received depended on the costs of care provided; gag clauses forbidding disclosure of financial incentives to patients; receiving capitation payments from at least one plan; and employment in a health maintenance organization. Being compensated on a fee-for-service basis or receiving a salary with incentive or bonus provisions (compared with straight salary) were associated with an increased likelihood of reporting an incentive to increase services to patients. However, physicians' overall methods of compensation had a relatively small impact on their perceived financial incentives compared with other factors.

These findings suggest that physicians' self-reported overall personal financial incentives within their practices are a valid summary measure of the mix of specific financial arrangements faced by most physicians. The next step, note the researchers, is to evaluate how physicians' perceptions of their financial incentives affect their behavior.

See "Measuring the effects of managed care on physicians' perceptions of their personal financial incentives," by Jean M. Mitchell, Ph.D., Jack Hadley, Ph.D., Daniel P. Sulmasy, M.D., Ph.D., and J. Gregg Bloche, M.D., J.D., in the Summer 2000 Inquiry 37, pp. 134-145.

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