How sensitive is physician performance to alternative compensation schedules? Evidence from a large network of primary care clinics
Article first published online: 8 OCT 2009
Copyright © 2009 John Wiley & Sons, Ltd.
Volume 19, Issue 11, pages 1300–1317, November 2010
How to Cite
Helmchen, L. A. and Lo Sasso, A. T. (2010), How sensitive is physician performance to alternative compensation schedules? Evidence from a large network of primary care clinics. Health Econ., 19: 1300–1317. doi: 10.1002/hec.1551
- Issue published online: 8 OCT 2009
- Article first published online: 8 OCT 2009
- Manuscript Accepted: 20 AUG 2009
- Manuscript Revised: 3 AUG 2009
- Manuscript Received: 29 MAR 2009
- physician compensation;
- piece rate;
- primary care
Despite its centrality for the provision of health care, physician compensation remains understudied, and existing studies either fail to control for time trends, cover small samples from highly particular settings, or examine empirically negligible changes in reward levels. Using a four-year sample of 59 physicians and 1.1 million encounters, we study how physicians at a network of primary care clinics responded when their salaried compensation plan was replaced with a lower salary plus substantial piece rates for encounters and select procedures. Although patient characteristics remained unchanged, physicians increased encounters by 11 to 61%, both by increasing encounters per day and days worked at the network, and increased procedures to the maximum reimbursable level. Copyright © 2009 John Wiley & Sons, Ltd.