How Geisinger structures its physicians' compensation to support improvements in quality, efficiency, and volume

The movement of US physicians toward working as employees rather than working as private practitioners is increasing interest in compensation systems that drive improved quality and efficiency without compromising the productivity of existing fee-for-service payment systems. We describe the approach of Geisinger Health System, an integrated delivery system in Pennsylvania that assigns about 20 percent of total expected physician compensation to incentives that support improvements in quality and efficiency along with growth in clinical volume. We believe that dedicating a moderate portion of physician compensation to achieving strategic goals, such as maximizing quality and efficiency, is improving the value of care provided at Geisinger. At the same time, because most of Geisinger's clinical care is still delivered and paid for on a fee-for-service basis, the incentives for clinical volume are enabling Geisinger to achieve the financial viability to pursue its mission.