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Payment Models Affect Practices

• Multiple practice leaders and market interviewees reported that their own practices or others in their markets were changing their organizational models in response to new payment models.
• Respondents perceived that alternative payment models have encouraged the development of team approaches to care management.
• Market observers and physician practices reported that global capitation and related shared savings models were changing relationships between primary care and subspecialist physicians.
• Physician practices reported making significant investments in their data management capabilities to track and improve performance in alternative payment models.
• The multiplicity of pay-for-performance and other incentive programs has created a heavy administrative burden for some physician practices.

Payment Models Affect Physicians

• The financial incentives applied to physician practices via alternative payment models were not simply "passed through" to individual physicians. Practice leaders described transforming certain practice-level financial incentives into internal nonfinancial incentives for individual physicians. Leaders acknowledged the presence of inconsistencies between financial and nonfinancial incentives. Alternative payment models had negligible effects on the aggregate income of individual physicians within the sample. Some physicians reported wanting to have their incomes more closely linked to quality and efficiency of care.
• Alternative payment models have not substantially changed how physicians delivered face-to-face patient care. Additional nonclinical work created significant discontent. Most physicians in practice leadership positions were optimistic and enthusiastic about alternative payment models, while most physicians not in leadership roles expressed at least some level of apprehension.

The project reported here, sponsored by the American Medical Association (AMA), aimed to describe the effects that alternative health care payment models (i.e., models other than fee-for-service payment) have on physicians and physician practices in the United States. These payment models included capitation, episode-based and bundled payment, shared savings, pay for performance, and retainer-based practice. Accountable care organizations and medical homes, which are two recently expanding practice and organizational models that frequently participate in one or more of these alternative payment models, were also included. Project findings are intended to help guide efforts by the AMA and other stakeholders to make improvements to current and future alternative payment programs and help physician practices succeed in these new payment models — i.e., to help practices simultaneously improve patient care, preserve or enhance physician professional satisfaction, satisfy multiple external stakeholders, and maintain economic viability as businesses. The report provides both findings and recommendations.

• Chapter One

  Introduction

• Part One

  Model, Background, and Methods

  • Chapter Two

    Conceptual Model

  • Chapter Three

    Background: Scan of the Literature on Effects of Payment Models on Physician Practice

  • Chapter Four

    Methods

• Part Two

  Results

  • Chapter Five

    Changes in Organizational Structure

  • Chapter Six

    Changes in Practice Operations

  • Chapter Seven

    Increased Importance of Data and Data Analysis

  • Chapter Eight

    Interactions Among Payment Programs and Between Payment Programs and Government Regulations

  • Chapter Nine

    Physician Incentives and Compensation

  • Chapter Ten

    Physician Work and Professional Satisfaction

  • Chapter Eleven

    Factors Limiting the Effectiveness of New Payment Models as Implemented

  • Chapter Twelve

    Conclusions

• Appendix A

  Advisory Committee Members