Rand: Most health systems pay physicians based on volume, not quality

Physicians employed by group practices owned by health systems are mostly paid based on the volume of care, despite recent insurance companies' efforts to pay based on quality, a Jan. 28 Rand study published in Jama Health Forum found.

Seventy percent of practices follow a volume-based compensation plan, according to the analysis. For more than 80 percent of primary care physicians and more than 90 percent of physician specialists, volume-based compensation is the most common.

Although many health systems have financial incentives for quality and cost, only 9 percent of primary care providers and 5 percent of specialists have compensation based on those criteria.

"Despite growth in value-based programs and the need to improve value in healthcare, physician compensation arrangements in health systems do not currently emphasize value," Rachel Reid, the study's lead author and a physician policy researcher at Rand, a nonprofit research organization, said in a news release emailed to Becker's. "The payment systems that are most often in place are designed to maximize health system revenue by incentivizing providers within the system to deliver more services."

The study looked at physician payment structures for 31 physician organizations affiliated with 22 health systems across four states. The researchers interviewed leaders, examined compensation documents and surveyed physician practices.

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