The Wall Street Journal health blog reported that a large physician search firm said that seventy-four percent (74%) of the jobs recruited for in the year ending March 31 featured a performance bonus for physicians, and ninety percent (90%) of the time the bonus was linked to volume, not quality. This is often called “fee-for-service.” Less than seven percent (7%) bonuses tied physician rewards to quality or cost goals.
Fifty-six percent (56%) of physicians nationally are employed by hospitals, an increase from fifty-one percent (51%) in the prior year and only twenty three percent (23%) in 2003 to 2005. This trend is accelerating because hospitals are buying physician practices and merging other hospitals.
Clearly health care payment reform will not work unless the fee for service model is changed to a model with shared risk for physicians and a focus on quality.