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Physician Revenue Sources

By January 5, 2018Commentary

The American Medical Association surveyed about 3500 physicians regarding their revenue sources in 2016.   (AMA Survey)   About 60% said their practice received at least some revenue from an alternative payment model, alternative meaning reimbursement other than fee-for-service.  Of these alternative methods, bundled payments and pay-for-performance were the most widespread, with 35% of physicians saying their practice had gotten at least some reimbursement via these approaches.  But generally, it is a small part of total revenue.  Pay-for-performance accounted for 7% of revenue, on average, as did capitation, while bundled payments represented an average of 9% of revenue and shared savings 2%.  The vast majority of practice revenue is still fee for service, and the amount has even increased slightly, as it was 71% in 2016 versus 69% in 2012.  Solo and smaller practices were much less likely to receive revenue from one of these alternative payments, with only 7.4% of solo doctors saying they participated in such reimbursement.  Primary care doctors were more likely than specialists to get alternative payments, but 84% of them still get at least some fee-for-service revenue.

Physicians and physician practices which are medical homes or participate in an accountable care organization also had more exposure to alternative payment methods.  26% of doctors say their practice was a medical home and 44% said it participated in at least one ACO.  Participation in a Medicaid ACO was lowest, at only 21%, while 32% were in a Medicare ACO and 32% in a commercial one.  The numbers may have some inaccuracy, however, because 25% of respondents said they weren’t even aware of whether their practice was an ACO or a medical home.  Hard to be effective at one of these approaches if your doctors don’t even know you are one.  With so many doctors being employed by health systems now, you might expect some unawareness, and 57% of employed physicians said they were not aware of medical home or ACO status.  More surprising is that 29% of practice owners said they didn’t know if they were participating in these models.  This is astounding.  Sounds like payers or other ACO and medical home sponsors need to spend some time raising awareness and providing some direction on how to be successful in these models.

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