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Expert tips for incentivizing physicians to embrace value-based care

In order to change the way care is delivered, an individual outfit needs to have a sufficient percentage of its practice in a value-based world.

Jeff Lagasse, Associate Editor

Physicians, doctors and other hospitalists are operating in a healthcare industry that is steadily moving away from reimbursement schemes based on sheer volume and productivity. Value-based care is the way of the future, and yet physician behavior can sometimes stay stuck in a fee-for-service mindset, with an emphasis on squeezing in a couple dozen patients a day.

Incentives are necessary to change physician behavior, said Dr. Debbie Zimmerman, chief medical officer at Lumeris. With 28 years of experience on both the payer and provider side, Zimmerman has seen that, often, physicians just need that little extra push.

"Where we find the heaviest lift in any institution is changing the way physicians practice," said Zimmerman. "They're in that fee-for-service world, based around productivity, seeing 25 patients a day. When you're practicing that way, the reality is you're referring people to specialists. There's no one person who's the quarterback. That is really key."

Recently, Lumeris conducted a study that aimed to identify the drivers of success in value-based care. There were a few, and with them, Lumeris was able to predict medical costs with about 95 percent accuracy.

First, in order to change the way care is delivered, an individual outfit needs to have a sufficient percentage of its practice, either by volume of patients or by revenue, in a value-based world. Having 5 percent of patients on a value-based contract likely won't be enough to make meaningful change, so the key is to start with a narrow network.

Then of course there need to be incentives, and the first is between the payer and the provider organization. The question needs to be asked: Do my contracts with patients incentivize total cost of care, quality and access? This mentality then needs to trickle down to the internal doctor; everything can be set up for value-based success, yet individual providers can continue to get paid in a fee-for-service manner, which does nothing to change physician behavior.

Clinical leadership and governance are crucially important, as is having the right data and information, said Zimmerman.

"When presented with two patients with the same condition, a physician will treat those patients to the best of their ability," she said. "But what we find is, in value-based relationships, the physician has access to different information about that patient. If I take care of a patient in a fee-for-service world, I only know the care I've given to that patient, but 30 to 50 percent of the care is provided outside of the health system. Visibility across the continuum of care is really important. You need visibility into the total cost of care."

Delivering a different kind of primary care requires those foundational elements, but incentivizing physicians is where tangible change starts to happen. Not all incentives are financial in nature; simply recognizing physicians for quality work can go a long way.

But the financial incentives need to change, said Zimmerman, and those conversations often start with how much is being paid based on productivity versus value. Having 5 percent of payments based on value isn't going to cut it. That number needs to be around 25 or 30 percent, though admittedly, changing someone's compensation can be controversial.

"There are a couple of things to start with," she said. "First, really make sure the incentives themselves are balanced. "No one wants to see that 100 percent are based on cost, or 100 percent on quality. We believe there should be a combination of group incentives and individual incentives."

Zimmerman also suggested getting the message across that leadership and physicians are in this together to encourage both individual accountability and working together such that 50 percent of a physician's pay might be based how he or she performs as an individual. 

"You can have population-level metrics, and at the group level they may be credible, but when you get down to the individual physician level it may not be. You need to make sure the measures are credible and well-defined, and people have a view into their performance," Zimmerman said. "And I shouldn't find that out at the end of the year. I need to have the ability to impact that performance over the course of the year.

The arrangement needs to reward high performers, she said. Without individual performance incentives, the high-performing physicians are disincentivized. Zimmerman suggested starting out with a larger percentage at the group level, and then moving the needle from there.

It can be a tricky balance, but changing physician behavior requires that step.

"We behave the way we're incentivized to behave," Zimmerman said.

Twitter: @SusanJMorse
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