The Relationship between Physician Compensation Strategies and the Intensity of Care Delivered to Medicare Beneficiaries

Authors

  • Bruce E. Landon,

    1. Department of Health Care Policy, Harvard Medical School and the Division of General Medicine, 180 Longwood Avenue, Boston, MA 02115
    2. Division of General Medicine and Primary Care, Beth Israel Deaconess Medical Center, Boston, MA
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    • Address correspondence to Bruce E. Landon, M.D., M.B.A., M.Sc., is with the Department of Health Care Policy, Harvard Medical School and the Division of General Medicine, 180 Longwood Avenue, Boston, MA 02115; e-mail: landon@hcp.med.harvard.edu. Bruce E. Landon, M.D., M.B.A., M.Sc., is with the Division of General Medicine and Primary Care, Beth Israel Deaconess Medical Center, Boston, MA. James D. Reschovsky, Ph.D., is with the Center for Studying Health Systems Change, Washington, DC. James O’Malley, Ph.D., is with the Department of Health Care Policy, Harvard Medical School, Boston, MA. Hoangmai H. Pham, M.D., M.P.H., is with the Centers for Medicare and Medicaid Services, Baltimore, MD. Jack Hadley, Ph.D., is with the College of Health and Human Services, George Mason University, Fairfax VA.

  • James D. Reschovsky,

    1. James D. Reschovsky, Ph.D., is with the Center for Studying Health Systems Change, Washington, DC
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  • A. James O'Malley,

    1. James O’Malley, Ph.D., is with the Department of Health Care Policy, Harvard Medical School, Boston, MA
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  • Hoangmai H. Pham,

    1. Centers for Medicare and Medicaid Services, Baltimore, MD
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  • Jack Hadley

    1. College of Health and Human Services, George Mason University, Fairfax VA
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Abstract

Objective. To examine the relationship between primary care physicians' (PCPs) payment arrangements and the total costs and intensity of care for specific episodes of care for Medicare beneficiaries.

Data Sources/Study Setting. We combined data from the 2004 to 2005 Community Tracking Study Physician Survey on PCP compensation methods with administrative data from the Medicare program for beneficiaries to whom these physicians provided services over the time period 2004–2006.

Study Design. Cross-sectional analysis of physician survey data linked to Medicare claims.

Principal Findings. The 2,211 PCP respondents included 937 internists and 1,274 family or general physicians who were linked to more than 250,000 Medicare enrollees. Most physicians (62 percent) had been in practice for 11 or more years and 87 percent were board certified. The total spending models show that for both employed physicians and owners, those in highly capitated practice environments had the lowest risk adjusted spending per beneficiary, whereas those receiving just productivity payments had the highest spending. These physicians also had lower intensity of care for episodes of care.

Conclusions. Physicians in highly capitated practices had the lowest total costs and intensity of care, suggesting that these physicians develop an overall approach to care that also applies to their FFS patients.

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