Rewarding Doctors for Quality Care Isn’t So Simple
Blue Cross of California made headlines across the country a few weeks back with news that the big health insurer was going to start paying doctors bonuses for providing high-quality medical care. This was important “news,” many newspapers said, because it represented a significant change in the business practices of the HMO industry, which has taken a beating in the press for paying more attention to profits than to patients.
“In a Shift, an HMO Rewards Doctors for Quality Care,” trumpeted the New York Times. A San Jose Mercury News story stated that “Blue Cross is believed to be the first for-profit managed care network system to offer incentives based upon customer satisfaction instead of profit.” And a story in the Los Angeles Times described the Blue Cross move as “a radical departure from industry practice,” noting that “experts said other HMOs probably will follow suit.”
That journalists so easily swallowed Blue Cross’ carefully crafted news release says a lot about how well the media dig behind the information they are fed. It also says a lot about how many reporters fail to understand the intricacies of an admittedly very complex medical system. With a little more checking, reporters could have learned that many HMOs, including Blue Cross, were already offering bonuses to doctors who did well on various measures of quality of care and customer service.
Aetna-U.S. Healthcare, a for-profit HMO, has been giving bonuses to primary care physicians in the East based on indicators of clinical quality and customer satisfaction since the late 1980s. Kaiser Permanente has been doing so in Southern California since 1995. And six months before the Blue Cross announcement, Blue Shield of California unveiled an incentive plan that gives medical groups who choose to participate extra money for good satisfaction scores and improvements in clinical quality.
Blue Shield’s bonus plan, however, was “rolled out in a less promotional way,” says Jeffrey Rideout, chief medical officer. “Maybe that was an error. The implication that Blue Cross was doing something new and the rest of us have to catch up just isn’t true.”
Why do doctors need incentives anyway? Making sure women have Pap smears and mammograms and treating patients with respect seems pretty elementary and should automatically be part of good doctoring. Physicians are very busy and sometimes don’t have time to focus on the right thing, says Dr. Ronald Bangasser, medical director of the Beaver Medical Group in Redlands.
They are also human, Bangasser observes, and respond to rewards like everyone else. With that in mind, Bangasser says he’s handed out movie tickets and $25 gift certificates for meals at local restaurants to cajole his doctors into improving the quality of care they deliver.
But gift certificates to Sizzler or a little extra cash are but a pittance of an individual doctor--or medical group’s--total compensation. Most of a medical group’s money comes from a “capitation” payment that covers the cost of care needed by an HMO’s members who sign up for a particular practice. Under the former Blue Cross plan, medical groups could earn a bonus as large as 10% of their total payment. A small part of the bonus was based on delivering good medical care and service; the rest was tied to the doctors’ ability to control costs by limiting the use of services, including referrals to specialists and hospital stays. Controlling services has been the major vehicle HMOs have used to drive down medical costs.
But limiting services may have run its course as a way to contain costs, which is one reason Blue Cross says it has shifted the mix of incentives. Now doctors’ entire bonuses-still the same 10%--will be based on quality indicators. “We think we’ve seen the maximum potential savings, so it’s no longer cost-effective to track this,” says Blue Cross spokesman Michael Chee. “Medical groups already know what to do.”
It’s hard to believe that health plans are giving up on controlling costs, especially with the explosion in new medical technology, growing patient demand for treatment and double-digit increases in insurance premiums. And it’s unlikely employers, who pay most of the bills, are going to play dead.
So how is Blue Cross going to control costs? “It’s a grand experiment that will take some time to play out,” Chee says. “Cost control will be a function of quality delivery of care.” In other words, it’s going to be up to doctors to hold medical costs in check. But aren’t these the same docs who, according to Bangasser, needed goodies dangled in front of them to do the right thing? The same doctors who, not so long ago, before HMOs became so influential, were criticized for running up costs by performing unnecessary tests and treatments?
The Blue Cross move had the flavor of a public relations ploy aimed at patients and doctors. But it also upstaged a broader effort by a large group of health plans and physician groups to hammer out their own program to promote medical quality. Such a program would include a standard way of measuring quality, standard incentives for doctors and require all health plans to participate.
The Integrated Healthcare Assn., which represents employers, health insurers and others, has been working for more than a year to coax these groups to agree on a way to measure and reward the delivery of quality medical care. It’s a tough sell, and the group’s executive director, Beau Carter, says they might reach agreement only on a standard set of measurements, not the financial incentives.
If every health plan goes its own way, Carter says, “it diminishes the power to change physician behavior.” The benefits for patients are obvious. If each health plan plays by its own rules, doctors, who must cope with different sets of quality measures--now mostly voluntary--may become frustrated and stop complying. Consumers who want to use quality indicators to choose a plan will do the same, resorting to recommendations from family and friends.
California already has experience with health plans going their own way. Each HMO that puts out a “report card” that rates the performance of its various medical groups uses its own rating system, which means the scorecards are useless for providing an apples-to-apples comparison for patients. One HMO may give a medical group a high rating on a quality measure. Another health plan may give the same group a low rating on the same measure.That’s why a standard procedure is needed. If every health plan and every physician group acts as a renegade cowboy, consumers will continue to consult family and friends, and the goal of higher quality care for all Californians will remain elusive.
*
Trudy Lieberman is the author of “Consumer Reports Complete Guide to Health Services for Seniors” (Three Rivers Press, 2000). Send comments to trudyal530@aol.com. Health Matters runs on the third Monday of the month.
