Quality is important, but productivity rules

Despite a rise in the use of quality incentives to determine physician compensation, productivity remains the predominant determinant. “Despite the recent interest in pay for performance, quality-based physician compensation has been around for a long time,” says James Reschovsky, PhD, coauthor of “Physician Financial Incentives: Use of Quality Incentives Inches Up,” a report issued by the Center for Studying Health System Change. “Incentives tied to productivity clearly continue to play a much more important role than quality measures.”

According to the report, the proportion of physicians in group practice whose compensation is based in part on quality measures increased from 17.6 percent in 2000–2001 to 20.2 percent in 2004–2005, but basing pay on individual productivity is much more common, affecting about 70 percent of physicians who are not in solo practice. Nevertheless, nearly all physicians with quality incentives are also judged on productivity.

The report also notes that quality-related compensation is more common among primary care physicians than among specialists, and among PCPs, more common among those who treat adults than among those who treat children.

Nearly two thirds of physicians in group/staff model HMOs (who constitute 6 percent of physicians in non-solo practice) reported that quality measures affect their compensation, with more than a quarter reporting that quality is a very important factor in determining their compensation.

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