Clinical Pathology Laboratory News

Physicians Still Paid by Quantity, not Quality

National efforts to improve patient safety and increase the quality of care are causing researchers to carefully study the behavior of physicians and how their practice patterns are linked to reimbursement. Not surprisingly, a system of fee-for-service reimbursement rewards many physicians for the quantity of patients they treat more than for achieving improved healthcare outcomes.

Physicians are still being paid predominantly according to the amount of patients they see, not the quality of work they do, said study published by the Center for Studying Health System Change.  The study, entitled Physician Financial Incentives: Use of Quality Incentives Inches Up, but Productivity Still Dominates, noted that more doctors than ever before are being paid on the basis of quality of care. However, salaries for the vast majority of America's physicians - 70% of doctors who weren't in solo practices - remain tied to productivity due to a reimbursement system founded on fee-for-service.

That situation is changing, as growing numbers of physicians are offered different types of compensation arrangements. The survey indicated that financial incentives were tied to quality indicators for 20.2% of doctors in group practices in 2004-2005, up from 17.6% in 2000-2001.  The percentage increase is small but statistically significant.

Some experts believe the predominance of fee-for-service reimbursement is a cause for concern. They point to a study from the Archives of Internal Medicine  entitled House Staff Team Workload and Organization Effects on Patient Outcomes in an Academic General Internal Medicine Inpatient Service.  That study found that heavier workloads for hospital residents and their supervisors can lead to increased lengths of stay for patients, greater costs, and higher risks of death.  Each additional admission for a team of caregivers led to higher costs and additional risks for all of the team's patients. 

Laboratory executives and pathologists can learn several things from these studies.  Assigning pathologists and lab techs more work than can be comfortably completed during an eight-hour work day will likely lead to errors and/or an overall decrease in efficiency.  Also, it is wise to craft compensation plans and incentives guided by objective measures that encourage and reward effective work practices and higher outcomes.

Related Articles:

Physician Financial Incentives: Use of Quality Incentives Inches Up, but Productivity Still Dominates

House Staff Team Workload and Organization Effects on Patient Outcomes in an Academic General Internal Medicine Inpatient Service