How Plans Influence Physician Practice Patterns
Jan 19, 2016
How Plans Influence Physician Practice Patterns
Plan for Today
• How Plans Influence Practice Patterns
• Team Meeting
(Framework )
Influencing Practice Patterns
• Selective contracting
• Use of gatekeepers
• Financial incentives
• Utilization review
• Profiling
• Clinical guidelines or protocols
The Goals:
• Reduce unexplained variation in treatment patterns
• Improve quality– Underuse, overuse, misuse
• Lower costs
What Do Managed Care Plans Do to Affect Care?
Remler et al.
Inquiry 34(3): Fall 1997
Financial Incentives
• Capitation• Risk/bonus pools for referrals and hospital• Penalties/bonuses for achieving performance
measures– Immunization rates– Mammography rates– Patient satisfaction– Productivity
Average share of physicians’ patients who are covered under different financial
arrangements (1995)
Financialarrangement
Allphysicians
PCPs Medicalspecialists
Surgeons
Capitation tophysiciangroup
13 18 10 10
Capitation toindividualphysician
8 9 5 7
Compensationlinked to use
16 17 14 16
Primary care physicians in managed care in California (1996)
• Financial incentives– Use of referrals (14%)
– Use of hospital (19%)
– Patient satisfaction (21%)
– Productivity (18%)
• Median earnings from bonus = 7% of net practice income
Grumbach et al. “Primary Care Physicians’ Experience of Financial Incentives in Managed Care Systems,” JAMA 339(21):1516-1521, November, 19, 1998.
Primary care physicians in California (1996)
• 58% of physicians with bonuses based individual and group performance
• 15% of physicians with bonuses based on individual performance only
Grumbach et al. “Primary Care Physicians’ Experience of Financial Incentives in Managed Care Systems,” JAMA 339(21):1516-1521, November, 19, 1998.
Utilization Review
“What percentage of the patients you see have health plans that review:– Your clinical decisions about the appropriate
site of care, including inpatient, outpatient and emergency room care?
– The content of your diagnosis or treatment decisions to assess appropriateness?
– The length of hospital stays of your patients?”
Remler et al.
Average share of physicians’ patients who are subject to managed care techniques (1995)
Technique Allphysicians
PCPs Medicalspecialists
Surgeons
Site of care 45 45 40 49Length ofstay 59 58 56 62Treatmentappropriate-ness
39 38 34 43
Utilization review denials: Percent of patients for whom recommended care denied coverage
First-rounddenial
DenialReversed
Overalldenial rate
Hospitalization 3.4 67 1.0
Surgery 3.7 65 1.2
Referal to specialistof choice
5.7 57 2.6
Substance abuse(referral of choice)
4.2 39 2.8
Mental healthreferral
5.8 52 3.0
“For what percentage of all the patients you see
• Are you provided with profiles of your clinical activity to identify outliers in the use of services, diagnoses, and/or treatments?
• Are there condition-specific protocols or guidelines for physicians to use in making diagnoses or prescribing treatments?”
Remler et al.
Average share of physicians’ patients who are subject to managed care techniques (1995)
Technique Allphysicians
PCPs Medicalspecialists
Surgeons
Profiling 16 22 21 13
Protocols 16 17 12 16
Limitednetwork
25 29 24 23
Physician profiles
Spock McCoy Who
Referralsper 1000
12 11 15
Admissionsper 1000
5 6 10
Lab $ perpatient
$353 $375 $469
Issues in Profiling
• Sufficient patient volume– So that differences not just due to random
variation
• Case-mix differences
• Information system requirements
Physician Adherence to Protocols
• Perceived legitimacy– Expert consensus– Based on scientific evidence– Involvement of local physicians
• Perceived purpose– Quality– Cost
Physician Adherence to Protocols(cont.)
• General dissemination not effective– Announcements– Conferences
• Requires active strategies, in combination– Participative workshops– Outreach visits (academic detailing)– Patient involvement– Reminders or audit with feedback
HMO Market Structure and Performance: 1985-1995
Wholey, Christianson,
Engberg and Bryce
Health Affairs 16(6): Nov/Dec 1997
Hospital Days and Ambulatory Visits for Non-Medicare Enrollees
Year Hospital Days per 1000 Ambulatory visits permember
Group IPA Group IPA
1985 353.46 400.14 4.45 4.76
1995 254.96 263.67 5.22 5.53