Review of Physician Financial Incentive Programs

Readers of our blog know that we are found of tweaking proponents of all the fancy initiatives to “improve quality and reduce costs” in health care, largely because overall spending continues to go up at a rapid rate; most of them aren’t really that new and different, and most importantly, solid research evidence to demonstrate that they actually work across a significant segment of the population is often lacking or inconclusive.  A new Cochrane Review looks at the effects of financial incentives on the quality of care delivered by primary care physicians.  Medicare and all the other payers and policymakers pushing this tactic should take careful heed.   (Cochrane Review)

The Cochrane researchers found only 7 studies that they adjudged to be of sufficient quality to include in the review.  Even these were generally viewed to have design defects which increased the likelihood of positively biased results.  These studies examined several different incentive schemes and several different health services or diseases which were targeted by the incentive programs.  Six of the seven studies found modest positive evidence that quality improved on some but not all of the measures targeted.  One found no improvement.   The researchers urged caution in moving ahead with many of the incentive schemes and made suggestions for better research.

We aren’t necessarily opposed to physicians being penalized or incented for delivering more or less appropriate care and producing better or worse health outcomes.  But there are problems with the design of most programs, including lack of flexibility on guidelines, measurement and attribution issues and over-reliance on process of care measures which often have no proven connection to better outcomes, which should be the true end goal of any quality improvement initiative.  Furthermore, most of these programs impose significant administrative burdens on providers, adding to their cost of doing business and their frustration with how health care is paid for.  Policymakers should require much stronger research evidence than they currently have before they continue to expand these programs.