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Physician incentive plan boosts physician/patient satisfaction: 5-year-old plan at Priority Health shows success. (Compensation).

With uncertainty continuing to plague health care, physician discontent is running deep.

A recent national survey, for example, found that 46 percent of physicians contemplated leaving medical practice. Although causes of physician discontent are many, one primary reason is economic.

Crafting a physician incentive plan that addresses legitimate provider concerns, aligns physician behavior with health plan strategic planning and provides patients and employers with high-quality, low-cost care is difficult.

Priority Health, one of the largest managed care organizations in Michigan with over 365,000 members and more than 5,000 employers, has a 5-year-old incentive plan that appears to be working well--pleasing employers, patients and providers.

In 1997, Priority Health--with 28 hospitals and 3,000 physicians--instituted capitation payment plans for primary care physicians. That worried some employers who voiced concern about availability of necessary services for their workers.

Consultations with employers and physicians revealed a willingness to use Health Employer Data and Information Set (HEDIS) quality indicators to address employer concerns and a physician incentive plan (PIP) to reward providers who met consumer expectations.

The program's success is largely due to five unique characteristics learned by trial and error:

1. Meaningful physician participation in the development and ongoing modifications of the program

2. Periodic measurement of physician satisfaction

3. Providing a variety of tools to the physician offices

4. Measurement of patient satisfaction

5. Improvements in patient care

Two medical directors spearheaded the initial planning and implementation of the incentive plan. The medical directors conducted informal focus groups with physicians, employers and Priority Health staff.

Literature searches sought best practices in the industry that were utilizing HEDIS measures that were acceptable to patients, providers and employers.

The goals of the program were to:

1. Raise patient, physician and health-plan member satisfaction

2. Increase access

3. Improve the health of individual patients

Physicians in the Priority Health network were integral to the development of the initial program. They helped choose the measures, determined measurement methodology and assigned appropriate benchmarks.

Each year an advisory group of physicians reviews the current program and assists with decisions about how the program should be modified for the following year. Changes have included:

1. Eliminating measures

2. Adding new measures

3. Modifying benchmarks

4. Reviewing measurement methodology

For the two new disease management measures developed for the 2003 program, physicians participated in the work groups that chose and defined the measures.

Once the initial work was complete, a draft of the program was distributed to all network PCPs for comment. Physician feedback was then incorporated in the final program for the new year.

Physician satisfaction with Priority Health was 10.6 percent in 1996. Since the implementation of the PIP, satisfaction has increased fivefold. The 2001 rate was over 52 percent. This program is not solely accountable for the increase, but it contributed.

A study released in January 2002 by the Center for Studying Health System Change concluded that physicians perceive performance-based measures such as patient satisfaction and quality more positively than profiling based on utilization.

This program gives incentives to physicians for activities that result in better patient care. Priority Health has distributed nearly $15 million dollars to PCPs with this program. It is additional income to physicians for doing the right thing for patients.

Tools that work

Priority Health developed a number of tools to help make this incentive program work for physicians and their staff. The most robust tool is the patient registry.

Twice a year, physicians receive lists of their patients who are due or overdue for screenings or otherwise out of treatment compliance. The registries are helpful because:

* Many offices do not have tracking tools that allow them to notify patients who are due for screenings.

* The registries provide data that is otherwise unavailable to physicians, such as pharmacy utilization.

* The registries provide information in an easy-to-understand summary format that facilitates implementation of appropriate interventions across a population. Every member on the registry who is due or overdue for services receives a reminder postcard from Priority Health. The postcards are also made available to physician offices to send to patients.

Other tools include coding guidelines and customer service training for physicians and their staffs.

As part of PIP, Priority Health tracks patient satisfaction with their PCP. That information is then shared with physicians.

The data show members of Priority Health are consistently satisfied with their physicians. In fact, 96 percent would recommend their physician to a friend or relative.

The incentive program also made a difference in the quality of health care provided to Priority Health members. Immunization rates for varicella, mammography rates and physical exam rates for Priority health members all improved since the program began. Those measures are quantifiable.

What is less measurable is what it means to the individuals that this program touches.

Mary is a Priority Health patient in her 40's whose name appeared on a registry as overdue for cervical cancer screening. When her doctor's office called to schedule an appointment, Mary was reluctant. Eventually, a tenacious nurse convinced her to come in and have a Pap smear and exam. The findings led to a workup that revealed early state cervical cancer. Mary underwent a hysterectomy and has a more favorable prognosis than if she had waited longer.

What's next?

The next evolution of provider incentives for Priority Health is the hospital incentive program that is being rolled out this year. It was developed in response to the Institute of Medicine study of patient deaths due to medical errors and employer initiatives such as Leapfrog. The measures will fall into three categories

* Patient safety

* Quality

* Efficiency

The 5-year experience of Priority Health in designing and implementing the physician incentive plan found that plans may be more successful if they incorporate meaningful physician participation and feedback, support for the physician office by the health plan and measurement of both physician and patient satisfaction.
Priority Health * PIP Clinical Measure Planning * Results and Benchmarks

August 2002

PIP Measure Other source PIP 2002 PIP 2001
 Results Results

Immunizations 90% * 87% *

Varicella 84% * 86% *

Mammography 76% 76%

Physical Exams
Childhood 63% 64%
Adult 71% 73%

Assessing if Patients
Use Tobacco
Plan-wide rate 17% 31%
based on random 2000 chart review
chart review

Participating offices 81%
only with chart review

Use of "Advising"
Tobacco smokers to
quit codes

Management of
Diabetes: The percent 42%
of diabetics achieving at 2001 chart review
least one HbAlc of <7
(good control) by

Treatment of Asthma: 57%
Percent of members 2001 chart review
who utilized the desired
ratio of at least 2
controller to 1 rescue

Depression: use of 11%
a Priority Health 2001 chart review
depression worksheet,
in the medical record,
in conjunction with a
depression diagnosis

Pediatric Otitis Media: 69%
Treatment with no 2001 chart review
medication or use of
first line antibiotics
in a new episode.

PIP Measure PIP 2001 PIP 2002 Proposed
 Benchmark Benchmark PIP 2003

Immunizations 87% 90% 92%

Varicella 60% 80%

Mammography 82% 82% 82%

Physical Exams
Childhood 60% 65% 68%
Adult 73% 73% 75%

Assessing if Patients 75%
Use Tobacco
Plan-wide rate
based on random
chart review

Participating offices 75%
only with chart review

Use of "Advising"
Tobacco smokers to TBD
quit codes

Management of 50% of 50% **
Diabetes: The percent diabetics
of diabetics achieving at or top
least one HbAlc of <7 40%
(good control) by performance
12/31/02 of practices

Treatment of Asthma: 65% 65% **
Percent of members
who utilized the desired
ratio of at least 2
controller to 1 rescue

Depression: use of top 40%
a Priority Health performance
depression worksheet, of practices
in the medical record,
in conjunction with a
depression diagnosis

Pediatric Otitis Media: 75% **
Treatment with no
medication or use of
first line antibiotics
in a new episode.

* Of PCPs eligible for the measure.

** Further analysis required before finalization.

Kim Suarez is director, provider network management of Priority Health in Grand Rapids, Mich. She can be reached at (616) 464-8214 or by e-mail at

Jim Byrne, MD, is chief medical officer of Priority Health. He can be reached by phone at (616) 464-8362 or by e-mail at

Kent Bottles, MD, is president and CEO of the Grand Rapids Medical Education & Research Center for Health Professions in Grand Rapids, Mich. He can he reached by phone at (616) 732-6206 or by e-mail at
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Article Details
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Author:Bottles, Kent
Publication:Physician Executive
Geographic Code:1USA
Date:Mar 1, 2003
Previous Article:Role of the physician executive in consumer-driven care. (Consumer-Driven Health Care).
Next Article:Electronic documentation vs. dictation: how do they compare? (Medical Records).

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