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Managed care: An ever-growing part of physician income

MANAGED CARE January 2003. © MediMedia USA
Compensation Monitor

Managed care: An ever-growing part of physician income

MANAGED CARE January 2003. ©MediMedia USA












Whether you define managed care as a treatment philosophy or a payment mechanism, it's here to stay. Regardless of the mutations managed care has undergone in the last decade-plus, it is an entrenched part of the health care system — as confirmed by a recent study of physician practice revenue by the Center for Studying Health System Change. The survey indicates nothing to suggest that managed care is off to the dustbin — rather, that it is a continually evolving entity.

Managed care sources account for greater share of practice revenue

Nearly 91 percent of physicians contracted with MCOs in 2001. For those who do, almost 46 percent of practice revenue is derived from managed care sources, up 3 percentage points from 1997. In addition, the average number of managed care contacts per physician rose during this period — from 12.4 to 13.1 — despite consolidation in the managed care industry.

Capitation declines

No surprise here: The HSC surveyors found what others have indicated for at least two years — that capitation's heyday seems to be a memory of the '90s. For physicians with at least one managed care contract, the percentage of practice revenue derived from capitation had peaked by the turn of the century.

Financial incentives less often tied to paymentManaged care organizations have a history of trying to influence physician behavior by presenting physicians with incentive-laden contracts. The most common financial incentives — profiling, patient-satisfaction surveys, and quality-of-care metrics — however, seem to be waning. (By anecdote, however, it should be noted that during 2002, after the survey's end, many large MCOs began to endorse quality-of-care bonuses in physician contracts. See our cover story for more information.)

SOURCES: STRUNK BC, RESCHOVSKY JD. KINDER AND GENTLER: PHYSICIANS AND MANAGED CARE, 1997–2001; CENTER FOR STUDYING HEALTH SYSTEM CHANGE, WASHINGTON, 2002