Vest Pocket Business Coalition - Physicians Cite Reasons Incentives Are Onerous

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Physicians Cite Reasons Incentives Are Onerous

By Scott Shepard
The Daily News
October 24, 2007

A plan by two insurance companies to reward Memphis doctors based on efficiency and cost effectiveness has doctors upset. And it's not a problem with working under incentives, which have existed for years in health care, but with rating doctors based on their billing histories.

Representatives from both United HealthCare and Cigna have been making the rounds in West Tennessee explaining their new incentive programs, which will rate doctors who make the grade with higher reimbursements.

In an environment in which costs continue to escalate, carriers are under extreme pressure to rate providers who give the best dollar value, said physician Robert McLaughlin, medical director of Cigna HealthCare of Tennessee.

Insurance companies have mountains of billing information on every doctor, noted Richard Lachiver, an occupational medicine physician and market medical director of Tennessee and Arkansas for United. Billing data may contain some bias, but when aggregated it still shows clear patterns and points out opportunities for improvement.

It's unfortunate, he said, that this has become known as an incentive plan. Carriers would rather it be treated as an information-sharing project doctors could embrace. Physicians have been too slow to change, and the economics now are driving the system.

http://www.memphisdailynews.com/Editorial/StoryLead.aspx?id=99512

Comment from the Vest Pocket Healthcare Committee:

Since reimbursement rates are already set by contracts between insurers and physicians, this can't be about the specific fees that are billed since they are automatically adjusted down to contracted rates.

By using "mountains of billing information," the "best dollar value" will be determined by the frequency and intensity of services. Physicians who see their patients less frequently, do fewer procedures, and provide fewer intensive visits will be paid more for the services that they do deliver. The physicians who are most successful at selecting a larger number of healthy patients and dumping the sick ones will receive the highest compensation.

This is precisely the marketplace mentality that we have come to expect from the private insurance industry. The insurers say that this isn't an "incentive plan," but rather, in consumer-directed lingo, it is an "information-sharing project." In more traditional rhetoric, "when they say it isn't about the money, it's about the money."