Physician Compensation Article Review
This paper contains a critical analysis of an article on physician compensation practices. It will summarize the article including the author 's approach and conclusions, and it will evaluate the article 's strengths, weaknesses, and validity.
Article Summary
In the article "Physician Compensation: Are Physicians Paid to Promote Health and Well-Being?" author William Martin argues the need to align physician compensation with the interests of patients. Martin, an associate professor at DePaul University, establishes a case that "physician compensation must be designed in a way that not only benefits financial interests of physicians but also the health status/quality of life of patients. (Martin, 2015)."
Martin relays statistics from the Center for Medicare and Medicaid Services that physicians only account for 21.2% of the total health care spending, yet decisions physicians make in their practice make up the vast majority of health care spending based on ordering and referrals. Health care spending impacts health insurance premiums provided by employers and dollars spent by the U.S. government on Medicare, Medicaid, the Veterans Administration and the federal/state correctional system.
Four models of compensation are described: fee-for-service, capitation, hybrid and fee-for-value. Under the fee-for-service model, physicians are paid for productivity, which encourages physicians to see more patients and perform more procedures
Pay-for-performance payment model – healthcare payment systems that offer financial rewards to providers who achieve, improve or excel their performance on specified quality of care and cost measures (HealthCare Incentives Improvement Institute, N.D.)
Moreover, we see that some providers are focusing on what providers do and how they get reimbursed rather than what the patient needs, which is a focus that does not prioritize quality of care and therefore does not align with the Triple Aim framework. The problem presented regarding this matter is that the health care system lacks a patient-focused care of medical conditions that puts patients and their health needs first. For example, when we think of provider reimbursement, it is not in the patient’s best interest for the system to only have a simple fee-for-service structure. A structure like this one will only lead to an increase of health care expenses. Also, it fails to incentivize high-value service, which also does not align with the Triple Aim framework health care providers should go by. It is very crucial for the health care system in the United Stated to find a better balance between medical groups reimbursement and patients needs in order to reduce the risk of overutilization.
It is commonly believed that the method of physician remunerations affects their professional behavior. As a result, payment systems are therefore manipulated in attempts to achieve policy objectives with the primary aim to improve quality of care, contain cost and maintain recruitment of human resources in underserved areas. (2,1)
Four compensation models are laid out by the Bangor Family Physician case study. These models include: (1) revenue model; (2) net income model; (3) base salary plus
There is a growing trend in the United States called pay-for-performance. Pay-for-performance is a system that is used where providers are compensated by payers for meeting certain pre-established measures for quality and efficiency (What is Pay-for-Performance, n.a.). We are going to be discussing what pay-for-performance is. There are different aspects of pay-for-performance which include; the effects of reimbursement by this approach, the impact cost reductions has on quality and efficiency of health care, the affects to the providers and patients, and the effects on the future of health care.
The service-based pay structure provides significant motivation for healthcare providers to deliver as many services as possible, with little to no consideration of patient outcomes. Furthermore, this structure provides no incentive for certain key elements of healthcare such as patient education and care coordination, both of which have led to diminished costs and better outcomes for patients. I am of the opinion that very little quality improvement will take place if this pay-for-service model persists. The current transition from service-based pay to quality-based pay is definitely a move in the right
The Health Affairs published an article in about a proposed Medicare reform regarding the high levels of use of Medicare although there was little impact on individuals. Though this article dates back to 2002, the issue still remains true to this day. In this article, the authors explain that the high level of Medicare spending was mostly due to the increase number of physician visits, specialist consultations, and hospital stays, especially among those that had chronic illnesses. Although the spending is higher among such Medicare patients, this did not mean better effective care or health care outcomes. On the contrary, according to the article, more than 20% of the total
Capitation is basically a monthly fee paid my the patient to their provider. Discounted fees are a modified form of fee-for-service pay and has placed most of its burden on the MCO. Salaries are the way in which physicians are paid and how they receive their payments from their patients. It is extremely important to know about all of the different payment mechanisms because if we did not know this, we would have no idea who had control of the money that was being paid or who is responsible for collecting reimbursements from patients.
Capitation and fee-for-service has been an important part of managed health care for reimbursement for several years. The background history of capitation involves determining the patients’ eligibility, the density of geographic areas of PCP’s and payment amounts from sub-specialists. On the other hand, fee-for-service involves high costs, and more manipulation occurs with the fee-for-service (FFS). There are tangible reasons behind both payment services and the disadvantages surrounding them. Various authors offer insight and valuable opinions of the pros and cons of fee-for-service and capitation that need to be addressed.
3. Evidences say that physicians who are paid under FFS happen to treat patients with excess services and procedures than those who who are paid by other methods like capitation (Gosden, Forland, Kristiansen, et al., 2000). (Gosden T, Forland F, Kristiansen IS, et al. (2000). "Capitation, salary, fee-for-service and mixed
This is a difference of 12% between the hospitals and the physician services. That is huge if you think about it in terms of the amount of people you interact with on a given day or year. Most to almost all of the people you interact with will see at least one physician in an outpatient setting during that year. Few to none of the people you interact with this year will have gone to a hospital for services. That means that the few are taking up the most of the insurance dollars being spent.
In the book, health care providers are listed with their corresponding duties with a suggestion of how to compensate them for the services they offer. For instance, podiatrists take part in performing surgeries on legs and ankles of injured patients. The Podiatrists also have the license to prescribe any medicine to patients in the due process of providing health care services. The book purports that MD’s and DO’s are supposed to be paid the same amount as Podiatrists since they perform almost the same functions (Kongstvedt,
This articles presents very informational data regarding physician compensation and the promotion of health and well-being. The underlying premise of this article is that the interest of physicians and patients as well as the community should be better aligned to improve clinical and population health outcomes. The author presents The Triangle of Patient Centered Compensation as the ideal model to design or redesign compensation programs that seek to achieve better alignment between physicians, patient, as well as the community. She returns to the question stated in the title of the article, “Are Physician Paid To Promote Health and Well Being? The author concluded that it is hopefully evident that physician compensation makes a difference
Thanks for your informative post, I agree, pay for performance is a reimbursement method aimed at improving the experiences of patients at various health institutions. This method as you mentioned is becoming popular among health care policymakers and health care insurers. it is a method based on incentive paid by health care insurers to providers to encourage the overall improvement of providers’ healthcare services to their patients . The pay for performance is considering a method of reimbursement that has shifted much of the financial risks to the providers of health care. The shift in risks to providers could be a double-edged sword. For one, the method can be credited for allowing physicians accountability for costs containment and wellbeing of their patients to be emphasized within the health arena. On the other hand, P4P could result in physicians enrolling patients with less complicated health problems in the practices, or it could lead to physicians avoiding healthcare facilities in poorer neighborhoods with many chronic ill patients. That said, researchers do not concur that the pay for
Under capitation, physicians are given incentive to consider the cost of treatment. Pure capitation pays a set fee per patient, regardless of their degree of infirmity, and gives physicians an incentive to avoid the most costly patients (Miller, 2009). Providers who work under such plans focus on preventive health care, as there is greater financial reward in prevention of illness than in treatment of the ill. Such plans avert providers from the use of expensive treatment options. The proponents of this method of payment especially insurance companies argue that when health care providers are not paid extra for additional office visits any associated medical expenses, they are likely to be more conservative with their treatment assessments