Physician incentives: recognition plus money

February 1, 2006

When it comes to pay-for-performance programs, recognition of a physician's accomplishments, along with financial rewards, may be the combination needed to produce results.

When it comes to pay-for-performance programs, recognition of a physician's accomplishments, along with financial rewards, may be the combination needed to produce results. In more than half of the seven projects of Rewarding Results-a 3-year, $8.8 million study featuring several pay-for-performance models-the public or private reporting of how frequently physicians met certain quality measures played an important role in improving quality.

Of course, the financial incentive cannot be discounted as a key component. To make a difference, monetary rewards need to be large enough to motivate physicians to effect change. At a minimum, the incentive may need to be set at $5,000 per physician or at least 10% of a doctor's annual income.

While the study does not provide definitive answers for the most appropriate pay-for-performance program, it is a good first step. Suzanne Delbanco, CEO of the Leapfrog Group, an employer coalition devoted to improving health-care quality, told Modern Healthcare (11/21/05), "... what's exciting is that it's really the first tangible evidence we have that pay-for-performance does move health care in the right direction."