Policy‐Oriented Research on Improved Physician Incentives for Higher Value Health Care

Abstract

Policy makers (both public and private) are seeking ways to improve the value delivered within our health care system, that is, using fewer resources to provide the same benefit to patients, or using equivalent resources to provide more benefit. One strategy is to alter the predominant fee‐for‐service (FFS) economic incentives in the current system. To inform such policy changes, this paper identifies areas in which little is known about the effects of specific incentives (FFS, salary, etc.) on the two components of value: resource use and quality. Specific suggestions are offered regarding research that would be informative for policy makers, focusing on fundamental “building block” studies rather than overall evaluations of complex interventions, such as accountable care organizations. This research would better identify critical aspects of the FFS model and salary‐based payments that are particularly problematic, as well as situations in which FFS or salary may be less problematic. The research would also explore when alternatives, such as episode‐based payment might be feasible, or simply be hypothetical solutions. The availability of electronic health record‐based data in various delivery systems would allow many of these studies to be accomplished in 3–5 years with budgets manageable by public and private funding sources.

Guidance of healthcare development for metastatic cancer patients as an example for setting incentives

“…On the down side, capitation generally tends to induce inefficient capacity usage, for example by limiting treatment to just the basic requirements in order to increase profitability. For example, cancer patients who require simple procedures (usually those with earlier disease stages) become attractive in such models, whereas advanced cancers with time-consuming treatment are less accepted by cancer care providers in these contexts [4]. Furthermore, financial incentives comparable to capitation, such as variable compensation structures for physicians provided by different types of insurance (public versus private), can significantly predict the guidance of patients towards specific cancer care providers.…”

Apple Pickers or Federal Judges: Strong versus Weak Incentives in Physician Payment

“…In the fifth paper, Luft () provides specific suggestions for policy‐relevant research on physician incentives, focusing on areas where little is known and where one or two research findings may have important implications for policy makers. The paper focuses on research that can be accomplished within 3–5 years within the range of research budgets provided by federal research and private foundations.…”