California HMO: Doctor bonuses based on patient satisfaction

The Blues plan is no longer basing bonuses on cutting costs. Others may be following its lead.

By Cheryl Jackson, amednews staff. July 30, 2001.

Managed Care: What's Next?"
With the managed care system drawing complaints from all quarters, doctors, patients, payers and even insurers themselves found themselves looking for alternatives to a concept that hadn't met its promise of improving care while reducing costs. This 2000-02 occasional series highlighted what physicians and others were doing to come up with a way to improve the system -- or replace it with something else.

Blue Cross of California's very public pronouncement in July that it would base physician bonuses exclusively on patient satisfaction instead of cost control may not be an isolated incident. With corporate pressure on managed care plans to justify their ever-increasing rates, some are expecting more HMOs to make a similar move.

Under Blue Cross' plan, doctors could receive up to a 10% bonus on their quarterly payments if they score well on patient satisfaction surveys and on how well they provide preventive services. Previously, such a bonus had been tied to how well physician groups controlled costs. Contracts will be amended so that the bonuses are doled out in 2003.

Health plans across the country already tie compensation to patient satisfaction, although not exclusively basing physician bonuses on it. Blue Cross, a division of Thousand Oaks, Calif.-based WellPoint Health Networks Inc., introduced a satisfaction-based bonus system in 1994 and constructed its new system last year.

"The original decision to expand it was marketplace driven," said Michael Belman, MD, WellPoint's medical director. "Employers want more value for the premium. And from the physician side, physicians who receive incentives for quality care are more satisfied physicians."

Employers appreciate the idea of health plans rewarding physicians for quality and patient satisfaction, said Peter Lee, president of the San Francisco-based Pacific Business Group on Health.

"With the significant increase in health care costs, purchasers are increasingly turning their attention to the quality of care being provided because they question the increased payments they're making," he said. "There's been an increased scrutiny relative to quality as premiums have been rising in recent years." [...]

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