Primary care physician compensation method in medical groups: does it influence the use and cost of health services for enrollees in managed care organizations?
BACKGROUND
Growth of at-risk managed care contracts between health plans and medical groups has been well documented, but less is known about the nature of financial incentives within those medical groups or their effects on health care utilization.


OBJECTIVE
To test whether utilization and cost of health services per enrollee were influenced independently by the compensation method of the enrollee's primary care physician.


METHODS
Survey of medical groups contracting with selected managed care health plans, linked to 1994 plan enrollment and utilization data for adult enrollees.


METHODS
Medical groups, major managed care health plans, and their patients/enrollees in the state of Washington.


METHODS
Sixty medical groups in Washington, 865 primary care physicians (internal medicine, pediatrics, family practice, or general practice) from those groups and affiliated with 1 or more of 4 managed care health plans, and 200 931 adult plan enrollees.


METHODS
The effect of method of primary care physician's compensation on the utilization and cost of health services was analyzed by weighted least squares and random effects regression.


METHODS
Total visits, hospital days, and per member per year estimated costs.


RESULTS
Compensation method was not significantly (P>.30) related to utilization and cost in any multivariate analyses. Patient age (P<.001), female gender (P<.001), and plan benefit level (P<.001) were significantly positively related to visits, hospital days, and per member per year costs. The primary care physician's age was significantly negatively related (P<.001) to all 3 dependent measures.


CONCLUSIONS
Compensation method was not significantly related to use and cost of health services per person. Enrollee, physician, and health plan benefit factors were the prime determinants of utilization and cost of health services.
Conrad
D A
DA
Department of Health Services, University of Washington, Seattle 98195-7660, USA. dconrad@u.washington.edu
Maynard
C
C
Cheadle
A
A
Ramsey
S
S
Marcus-Smith
M
M
Kirz
H
H
Madden
C A
CA
Martin
D
D
Perrin
E B
EB
Wickizer
T
T
Zierler
B
B
Ross
A
A
Noren
J
J
Liang
S Y
SY
D002204:Capitation Fee; D005194:Family Practice / Q000191:economics* / Q000706:statistics & numerical data; D005260:Female; D017048:Health Care Costs / Q000706:statistics & numerical data; D019538:Health Care Surveys; D006760:Hospitalization / Q000706:statistics & numerical data; D006801:Humans; D008297:Male; D008329:Managed Care Programs / Q000191:economics* / Q000706:statistics & numerical data*; D015999:Multivariate Analysis; D009819:Office Visits / Q000706:statistics & numerical data; D010816:Physician Incentive Plans; D011320:Primary Health Care / Q000706:statistics & numerical data; D012044:Regression Analysis; D012052:Reimbursement, Incentive; D014861:Washington