Compensation Issues

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Viewpoint: 5 reasons 'pay for performance' fails physicians and patients

Pay-for-performance programs can harm physicians and patients, most notably when recognizing that physician skill is not the only factor that determines care quality, argue Kip Sullivan, member of the Health Care for All Minnesota Policy Advisory Committee and Stephen Soumerai, professor of population medicine at Boston-based Harvard Medical School, in a STAT op-ed.

"This 'performance' measure is not a measure of quality but a mishmash of many factors, only one of which might be physician skill," the authors wrote.

Here are five reasons pay-for-performance programs harm physicians and patients, according to the report.

1. A Medicare pay-for-performance program did not improve quality or reduce cost for physicians and hospitals and wound up penalizing physicians for treating the poorest and sickest patients because their quality scores suffered, according to a study published in Annals of Internal Medicine.

2. A JAMA Cardiology study found Medicare programs that reward and punish hospitals based on the number of hospital admissions of heart failure patients may have increased the hospital's death rates.

3. Physicians with patients who are older, sicker and poorer will score lower on the program's quality measure than physicians who treat healthier and higher-income patients. As a result, physicians who care for a disproportionate amount of sicker and poorer patients are more likely to be penalized and have fewer resources to treat their patients. 

4. When physicians know sicker and poorer patients will decrease their scores, some physicians may avoid treating these patients, which could cause patients to have preventable illnesses and more medical costs.

5. "Performance-based pay may improve the sales of products like dishwashers and computer products, but it is irrelevant to the complexities and professionalism of good doctoring and other human services like education," the authors concluded. "It's time to terminate these harmful bonus-and-penalty schemes."

More articles on compensation: 
10 ways compensation committees can best guide executive pay and performance
7 tech, finance giants banning the salary question
11 states, cities banning the salary question

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