Primary Care Physician Compensation Method in Medical Groups: Does It Influence the Use and Cost of Health Services for Enrollees in Managed Care Organizations?

CONTEXT.— Growth of at-risk managed care contracts between health plans and medical groups has been well documented, but less is known about the nature of financial incentives within those medical groups or their effects on health care utilization. OBJECTIVE.— To test whether utilization and cost of...

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Published in:	JAMA : the journal of the American Medical Association Vol. 279; no. 11; pp. 853 - 858
Main Authors:	Conrad, Douglas A, Maynard, Charles, Cheadle, Allen, Ramsey, Scott, Marcus-Smith, Miriam, Kirz, Howard, Madden, Carolyn A, Martin, Diane, Perrin, Edward B, Wickizer, Thomas, Zierler, Brenda, Ross, Austin, Noren, Jay, Liang, Su-Ying
Format:	Journal Article
Language:	English
Published:	Chicago, IL American Medical Association 18-03-1998
Subjects:	Biological and medical sciences Capitation Fee Compensation Family Practice - economics Family Practice - statistics & numerical data Female Health Care Costs - statistics & numerical data Health care expenditures Health Care Surveys Health participants Health services utilization Hospitalization - statistics & numerical data Humans Male Managed care Managed Care Programs - economics Managed Care Programs - statistics & numerical data Medical sciences Multivariate Analysis Office Visits - statistics & numerical data Physician Incentive Plans Primary care Primary Health Care - statistics & numerical data Public health. Hygiene Public health. Hygiene-occupational medicine Regression Analysis Reimbursement, Incentive Washington United States North America America Human Costs Health staff Managed care Health economy Public health organization Physician Health service Public health
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Summary:	CONTEXT.— Growth of at-risk managed care contracts between health plans and medical groups has been well documented, but less is known about the nature of financial incentives within those medical groups or their effects on health care utilization. OBJECTIVE.— To test whether utilization and cost of health services per enrollee were influenced independently by the compensation method of the enrollee's primary care physician. DESIGN.— Survey of medical groups contracting with selected managed care health plans, linked to 1994 plan enrollment and utilization data for adult enrollees. SETTING.— Medical groups, major managed care health plans, and their patients/enrollees in the state of Washington. STUDY PARTICIPANTS.— Sixty medical groups in Washington, 865 primary care physicians (internal medicine, pediatrics, family practice, or general practice) from those groups and affiliated with 1 or more of 4 managed care health plans, and 200931 adult plan enrollees. INTERVENTION.— The effect of method of primary care physician's compensation on the utilization and cost of health services was analyzed by weighted least squares and random effects regression. MAIN OUTCOME MEASURES.— Total visits, hospital days, and per member per year estimated costs. RESULTS.— Compensation method was not significantly (P>.30) related to utilization and cost in any multivariate analyses. Patient age (P<.001), female gender (P<.001), and plan benefit level (P<.001) were significantly positively related to visits, hospital days, and per member per year costs. The primary care physician's age was significantly negatively related (P<.001) to all 3 dependent measures. CONCLUSIONS.— Compensation method was not significantly related to use and cost of health services per person. Enrollee, physician, and health plan benefit factors were the prime determinants of utilization and cost of health services.
Bibliography:	ObjectType-Article-1 SourceType-Scholarly Journals-1 ObjectType-Feature-2 content type line 23
ISSN:	0098-7484 1538-3598
DOI:	10.1001/jama.279.11.853