Blue Cross to Begin Offering Doctors Bonuses for Quality of Care
Blue Cross of California, a unit of WellPoint Health Networks, will today announce plans to end the insurer's system of awarding bonuses to doctors for controlling costs and will instead begin to "link bonus payments directly to patient satisfaction," the Los Angeles Times reports. The move marks a "radical departure" from traditional managed care practice and is a "stunning indication that the industry's oft-criticized focus on cost containment no longer works," the Times reports. Under the new bonus program, physician groups that participate in Blue Cross' HMO network may receive up to a 10% bonus on their quarterly capitation payments by meeting "certain criteria" related to quality of care issues. Blue Cross will evaluate patient satisfaction by conducting periodic patient surveys, interviewing patients when they leave a doctors' group to determine whether "quality of care was the reason for the change" and tracking "how quickly patient grievances are heard and resolved." Blue Cross will also grade physician groups on several preventive health measures, and groups "will be expected to notify" the insurer when hospitals release their patients to allow case managers to "coordinate" home health care. Blue Cross will post the results of its evaluations on its Web sites four times a year for consumers.
Jeff Kamil, Blue Cross' vice president and medical director, said that the company has considered the new policy for about a year, adding that the program "isn't in response" to a federal patients' rights bill that the Senate passed last month. The managed care industry opposes the legislation. "The marketplace is stressing quality of care as the most significant issue. Our incentives are structured to emphasize quality of care (with) specific, measurable criteria built into contracts," Kamil said. He added that Blue Cross does not expect the new bonus structure to prompt increased health care costs, pointing out that "the emphasis on prompt referrals to experts and preventive treatment will help keep medical costs down in the long run."
Health analysts said yesterday that other managed care organizations will likely follow Blue Cross' lead, particularly in California. "This is a huge step forward," Peter Lee, president of the Pacific Business Group on Health, a San Francisco-based coalition that represents large employers, said, adding, "This raises the bar for other health plans in the state." According to a recent survey conducted by the group, quality of care criteria account for "no more than 2%" of the bonuses that doctors receive from HMOs, which still place more "weight" on cost-cutting measures. However, experts warned that shifting the emphasis toward quality over cost concerns would not represent a "panacea for managed care." Lee said, "We still have a system with significant shortfalls, where patients are not getting the care they should be getting." Many California physician groups, which have "struggl[ed] economically," said that bonuses for patient satisfaction would not compensate for the low capitation rates that they receive from heath plans. And Jack Lewin, executive director of the California Medical Association, said that the new bonuses could disproportionately benefit doctors who treat higher-income patients. "Physicians who take care of the sicker, poorer populations and populations with limited English proficiency might not do so well in this kind of reward system," he said (Gellene, Los Angeles Times, 7/10).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.