Association Between Physician Compensation Methods and Delivery of Guideline-Concordant STD Care: Is There a Link?

Published Online: July 01, 2005
Nadereh Pourat, PhD; Thomas Rice, PhD; Ming Tai-Seale, PhD; Gail Bolan, MD; and Jas Nihalani, MPH

Objective: To examine the association between primary care physician (PCP) reimbursement and delivery of sexually transmitted disease (STD) services.

Study Design: Cross-sectional sample of PCPs contracted with Medicaid managed care organizations in 2002 in 8 California counties with the highest rates of Medicaid enrollment and chlamydia cases.

Methods: The association between physician reimbursement methods and physician practices in delivery of STD services was examined in multiple logistic regression models, controlling for a number of potential confounders.

Results: Evidence of an association between reimbursement based on management of utilization and the PCP practice of providing chlamydia drugs for the partner's treatment was most apparent. In adjusted analyses, physicians reimbursed with capitation and a financial incentive for management of utilization (odds ratio [OR] = 1.63) or salary and a financial incentive for management of utilization (OR = 2.63) were more likely than those reimbursed under other methods to prescribe chlamydia drugs for the partner. However, PCPs least often reported they annually screened females aged 15-19 years for chlamydia (OR = 0.63) if reimbursed under salary and a financial incentive for productivity, or screened females aged 20-25 years (OR = 0.43) if reimbursed under salary and a financial incentive for financial performance.

Conclusion: Some physician reimbursement methods may influence care delivery, but reimbursement is not consistently associated with how physicians deliver STD care. Interventions to encourage physicians to consistently provide guideline-concordant care despite conflicting financial incentives can maintain quality of care. In addition, incentives that may improve guideline-concordant care should be strengthened.

(Am J Manag Care. 2005;11:426-432)

Referred to as "the captain of the ship," the physician traditionally has been the key agent in delivery of healthcare services.1 Many reforms in financial and organizational incentives have been implemented to control healthcare expenditures and improve quality of care by influencing physicians' practice. Analysts have been tracking how financial and organizational incentives in the healthcare system affect physician practice for decades and they have documented that physicians' practice is related to the incentives in the payment system.2-15 Recent evidence shows a decreasing trend, from 1997 to 2001, in the percentage of physicians who were subject to reimbursement based on profiling, patient satisfaction, or quality measures. In 2001, 17% of physicians reported that rates of preventive-services screening were used in determining their compensation. In contrast, the percentage of physicians who are encouraged to follow treatment guidelines has increased.16

The impact of different types of reimbursement on physician practices has been examined in some detail. The Institute of Medicine reported that payment incentives are misaligned with the delivery of high-quality care.17 The methods of physician payment (eg, fee-for-service [FFS], salary, capitation) usually do not reward good patient health outcomes. For instance, FFS offers incentives for providing more services, whereas capitation rewards conserving resources. One can result in overuse and the other in restricted use of resources. Although salary-based compensation does not necessarily encourage underuse or overuse, it does not provide incentives for improved productivity or efficiency. None of the payment systems, unless used in conjunction with other strategies, provide incentives for high quality. In some cases, perverse incentives could rise against quality improvement.17

Evidence shows that capitated physician groups put more emphasis on monitoring overuse than underuse of services like immunization, which may be attributed to financial incentives of capitation.18 Others have found that physician incentives that are based on the physician's own production (rather than the group) increase physician productivity.11 Some financial-productivity incentives may discourage the delivery of preventive care such as Pap smears and cholesterol checks, but not mammograms and flu shots.12

Clinical practice guidelines have been developed for many chronic diseases to promote practices that are consistent with current scientific understanding of the disease and treatment modalities, and to provide scientific guidance that could lead to optimal patient health outcomes. For sexually transmitted diseases (STDs), guidelines are primarily developed by the Centers for Disease Control and Prevention19,20 and the US Preventive Services Task Force.21 In California, state laws and the California Chlamydia Action Coalition22 have provided additional practice guidelines. In combination, these guidelines are designed to promote comprehensive and effective STD care. Evidence suggests that productivity, quality, and cost-containment incentives are associated with use of practice guidelines.13 Self-reported data indicate that for more than 50% of physicians studied, treatment guidelines have a moderate to very large effect on their practice.16

Although practice guidelines present a potential solution to the complexity of medical decisions,23 evidence of adherence to guidelines for various diseases has been discouraging.24-27 In addition, research on the impact of financial incentives on guideline adherence is limited. A small-scale randomized, controlled trial suggested that FFS physicians provided more care and conformed to pediatric care guidelines, whereas salaried physicians were in less conformity with guidelines.28 However, the current literature provides little information about the impact of reimbursement (and the incentives reimbursement represents) on delivery of STD care.

In this study, we investigate the association between physician compensation—independent of other determinants of physician practice—and the delivery of guideline-concordant STD care. The STD guidelines we examined included taking a sexual history of the patient at the first nonurgent visit,20,22 annual screening of sexually active females 15 to 25 years of age,20-22,29 providing chlamydia drugs for the partner's treatment or patient-delivered partner therapy,22 and providing services to minors without parental notification or consent (also California State Law, Family Code §6926(a)).20


Data and Sample

Surveys of Primary Care Physicians (PCPs) contracted with Medicaid HMOs in 2002 in 8 California counties with the highest rates of chlamydia and Medicaid HMO enrollment were used for this study. The PCPs who participated in the survey were contracted with a total of 25 Medicaid HMOs in the selected counties. Three plans folded early in the study period, and their PCPs either recontracted with another HMO in the study or lost their Medicaid HMO contracts. Two plans with fewer than 10 000 enrollees each refused to participate in the study. An electronic version of the participating plans' PCP directory was obtained, and an unduplicated database of all PCPs contracted with these HMOs was constructed and served as the sampling frame.

These PCPs were contacted by phone up to 12 times for a telephone interview from January through May 2002 and were offered $75 to participate in the 15-minute survey. The choice of a self-administered survey was offered to those PCPs who were unable to complete the interview by phone. The adjusted response rate was 41% (948) following the methodology used in another national survey of physicians.30 Of the unduplicated list of physicians provided by participating HMOs, 64% (6096) were found to be ineligible primarily due to outdated contact information or contractual changes in the time between the collection of the PCP list from HMOs and the fielding of the survey, and secondarily due to being specialists outside the scope of the study. Additional analysis of respondents and nonrespondents on the basis of available characteristics, including county and specialty, did not identify any nonresponse bias in the sample. This study was approved by the appropriate institutional review board, and all study subjects consented to participate in the survey.

Dependent Variables

Primary care physician adherence to STD guidelines was captured on a 5-point Likert scale ranging from 1 to 5, with 1 representing "always," 2 representing "usually," 3 representing "sometimes," 4 representing "rarely," and 5 representing "never." For the following analyses, all adherence variables were dichotomized into those who consistently (always, usually) followed a guideline versus those who did not (sometimes, rarely, never). This decision was based on the assumption that adherence to any practice guidelines often depends on the physician judgment of the appropriateness of the treatment or procedure given the presentation of illness, the patient's characteristics, and other circumstances. Thus, consistent adherence to guidelines can be appropriately defined as "always" and "usually" following guidelines.

Independent Variables

The main independent variable was PCP payment mechanism. Primary care physicians were asked to identify whether they were salaried physicians of an HMO or a medical group. Those who were not salaried were then asked whether they were reimbursed on a capitation or FFS basis by their affiliated health plan or medical group. They also were asked whether they contracted directly with the health plan, or through the medical group that provided the largest proportion of their Medicaid HMO patients. Primary care physicians also were asked whether their contracts with their HMOs or medical groups included stipulations for reimbursement based on their productivity (eg, number of visits), quality of care (eg, patient satisfaction or peer review), their management of utilization (eg, rate of referrals, laboratory tests, x-rays), or financial performance of the groups (eg, profit sharing). Each PCP may have reported more than 1 type of reimbursement.

Nine dichotomous independent variables were created to distinguish those PCPs reimbursed on an FFS, capitation, or salary basis and each of the 4 contractual stipulations or reimbursement mechanisms. The percentage of those reimbursed under FFS and any of the 4 reimbursement mechanisms was too small for these groups to be separately identified (ranging between 5.6% to 3%). The remaining variables included the 2 payment methods (capitation and salary) crossed with the 4 reimbursement mechanisms (productivity, quality of care, management of utilization, and financial performance (Table 1). Many PCPs reported more than 1 reimbursement mechanism, so the resulting variables represent mutually exclusive payment methods but overlapping reimbursement mechanisms. Therefore, the analyses of influence of payment on PCP practice are interpreted, for example, as the influence of salary and productivity on PCP practice versus the influence of other payment methods.

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