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Study Shows Growth of Primary Care Provider Pay Tied to Quality

Posted by Matthew Smith on Jul 5, 2013 10:34:00 AM

Physician CompensationWhile a new survey indicates that a small percentage of both primary care and specialist pay is tied to quality and patient metrics, it could be growing in the future.

For the first time in over 35 years of surveying physicians, the Medical Group Management Association (MGMA) included questions on quality and patient satisfaction metrics on its latest annual compensation survey, according to MGMA director of data solutions, Todd B. Evenson.

"Obviously, under the ACA and other value-based reimbursement that we see in the future, we'll see [quality metrics] as increasingly important components of physician compensation models," said Evanson. "So we felt that it was very important to begin that process to highlight how compensation plans are being changed based upon those changes to reimbursement models."

The "Physician Compensation and Production Survey: 2013 Report Based on 2012 Data," which surveyed over 60,000 physicians and nonphysician providers, found that primary-care physicians reported 3 percent of total compensation tied to quality metrics, while specialists reported 2 percent of compensation.

While this number is relatively small, MGMA president and CEO, Susan L. Turney, MD, said in a statement, "It's encouraging to see physician practices invested in patient-centered care and continuing to seek ways to better incorporate quality and experience into compensation methodologies."

Mary Barber, vice president of physician recruitment and retention firm, Cejka Search, agrees.

"We do see signals that these components [patient satisfaction and quality measures] will be growing in significance and proportion to total compensation. Primary-care physicians will be positioned as the care quarterback for their patients from an outpatient basis. And, in fact, physicians are positioned to lead and their compensation will reflect that reality," said Barber in an e-mail to Physicians Practice.

In the Physician Retention Survey 2011, the American Medical Group Association and Cejka Search asked physicians "what minimum percentage of incentive compensation is required to drive desired changes in practice outcomes for [quality measures]." Fifty-one percent of respondents felt that 3 percent or 5 percent of incentive compensation was sufficient to drive quality measures in their practices.

Evenson noted that while practices are already moving in the direction of patient-centered care and reimbursement contingent on quality measures, e.g. PQRS and e-prescribing programs, very often they are limited by the amount of funds available for that purpose. However, through the expansion of government initiatives like the EHR Incentive Programs, physicians are being paid for meeting quality measures like meaningful use, which, he said, could help them expand their own quality programs.

So while these metrics directly affect physician compensation, it will be a practice-wide effort, added Evenson, driving stronger relationships between physicians and staff.

"The administrative and support staff team will have a larger role ultimately in delivering that satisfying experience for the patient," he said. "As a result, it will be critically important for the physician and the administrator to develop a stronger relationship to be successful at that."

The MGMA survey also reported that the growth of physician compensation was relatively flat during the period 2011-2012, with a modest 5.6 percent increase for select primary-care specialties. Annual median compensation in 2012 was reported for selected specialties.

• Family Practice (without OB/GYN) — $207,117

• Pediatric/Adolescent Medicine ― $216,069

• Internal Medicine ― $224,110

• Obstetrics/Gynecology ― $301,737

• Cardiology Invasive ― $532,269

Topics: ACA, Primary Care, Physicians, Specialists, Accountable Care Act

Primary Care Physicians Flex Their Earning Muscles

Posted by Matthew Smith on May 9, 2013 11:00:00 PM

primary care physiciansUnderscoring the importance of pediatricians, internists and family physicians to the health care industry, a new study shows primary care physicians generating more revenue on average than specialists to hospitals.

While specialists still earn more money and certain specialists like orthopedic surgeons are still hugely important to hospital revenue streams, the overall trend shows less expensive outpatient care doctors taking on greater importance to hospitals and their parent health care systems, according to the survey that looked at the three primary care disciplines plus 15 other specialties by physician staffing and recruitment firm Merritt Hawkins, a subsidiary of AMN Healthcare (AHS).

Primary care physicians generated $1.56 million in average net revenue in 2012 to their affiliated hospital compared to $1.4 million for specialists, according to a survey of more than 100 hospital chief financial officers by Merritt Hawkins.  In 2010, specialist physicians on average generated nearly $1.6 million while primary care doctors brought hospitals about $1.4 million.

Mark Smith, president of Merritt Hawkins called the trend a “seismic shift,” as health care systems shift away from specialized medical care to primary care.

“Primary care physicians are increasingly employed by hospitals and in new delivery models, such as accountable care organizations (ACOs),” Smith said.

ACOs reward doctors and hospitals for working together to improve quality and to control costs. Physicians are critical to an ACO’s success in that doctors need to be a quarterback of sorts in using nurses and other caregivers to manage the medical-care of populations of patients.

ACOs link medical care providers together to improve quality. If the providers in the ACO achieve better outcomes, they divvy up money saved with the health plans.

ACOs last year began providing medical care services to seniors through contracts with the Medicare health insurance program for the elderly. In addition, most private health insurance companies, too, such as those operate by Aetna(AET), Cigna (CI), Humana (HUM), UnitedHealth Group (UNH), Wellpoint (WLP) as well as Blue Cross plans linking with ACOS to care for more patients.

Because ACOs and other new approaches to health care delivery emphasize lower cost outpatient care, revenue to hospitals from specialists like cardiologists or pulmonologists is dropping.  ACOs and patient-centered medical homes are also being paid by Medicare and insurance companies increasingly through bundled payments that emphasize primary care rather than specialized care.

A non-invasive cardiologist, for example, that generated $2.6 million for a hospital in 2002 generated less than half that amount or, $1.2 million this year – a decade later.  The Medicare health insurance program for the elderly has cut reimbursement for cardiology in recent years in part because many observers believe such doctors do a lot of unnecessary procedures. The lower revenue from cardiologists comes as studies have shown an overuse of certain procedures such as stenting to keep arteries open when cheaper generic cholesterol drugs abound and such drugs have reduced the need for heart procedures and surgeries.

The still sluggish economy has also impacted doctor revenue to hospitals. Revenue from the average ophthalmologist was more than cut in half last year to $725,000 per doctor from $1.6 million in 2010.

“Ophthalmology is one place you would see it as a lot of eye surgery is elective,” Smith said.

Strategic Provider Planning, Specialty Mix

Topics: ACO, Specialists, Primary Care Physician

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