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Physician Compensation Method Does Not Influence Resource Use.

Does the way physicians get paid influence how they practice medicine? This study analyzed the relation between physicians' compensation and their use of resources in the treatment of 200,931 adult patients assigned to 865 primary care physicians in four managed care organizations. Compensation methods included salary only for 46 percent of primary care physicians; the others received some combination of salary, productivity compensation, and other incentives.

No relation was detected between compensation method and any of the resource use measures, including total visits, hospital days, and total costs. Factors linked to greater resource use included patient age and female sex, and the plan benefits. Older physicians used significantly fewer resources for all three of these measures.

Comment: These results will come as a surprise to the many organizations agonizing about their physician compensation formulas. The findings suggest that, if compensation

is a determinant of resource use, it is not overwhelming.

— TH Lee

Published in Journal Watch General Medicine March 31, 1998

Citation(s):

Conrad DA et al. Primary care physician compensation method in medical groups: Does it influence the use and cost of health services for enrollees in managed care organizations?. JAMA 1998 Mar 18 279 853-858.

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