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Physicians as gatekeepers. The impact of financial incentives
1Department of Internal Medicine, Medical College of Virginia, Virginia Commonwealth University, Richmond.
Insights
Physicians order fewer diagnostic tests for health maintenance organization (HMO) patients compared to fee-for-service patients, primarily by reducing discretionary tests. Preventive services remained consistent across both patient types.
Area of Science:
- Health Services Research
- Medical Economics
- Clinical Practice Patterns
Background:
- Physician incentives to limit diagnostic test utilization are a subject of ongoing debate.
- Understanding how different payment models influence physician behavior is crucial for healthcare system efficiency.
Purpose of the Study:
- To investigate whether physicians order fewer diagnostic tests for patients in prepaid health maintenance organizations (HMOs) compared to fee-for-service patients.
- To determine if any observed reductions in testing are selective (e.g., discretionary tests) or indiscriminate.
Main Methods:
- Chart review of 273 new patients (167 fee-for-service, 106 HMO) seen by 17 physicians for check-ups.
- Categorization of diagnostic test use as 'indicated' or 'discretionary'.
- Logistic regression analysis controlling for patient age and sex.
Main Results:
- HMO patients underwent fewer diagnostic tests overall compared to fee-for-service patients.
- Reductions in testing for HMO patients were concentrated in discretionary tests.
- The proportion of preventive services remained similar across both patient groups.
Conclusions:
- Physicians selectively reduce discretionary diagnostic tests for HMO patients, suggesting a response to financial incentives.
- Preventive care delivery was not compromised in HMO patients relative to other patients.
Abstract:
Incentives encouraging physicians to reduce their use of diagnostic tests are controversial. We studied physicians enrolled in an independent practitioner association who see both fee-for-service and prepaid (health maintenance organization [HMO]) patients concurrently. We asked the following questions: (1) Do physicians order fewer tests for their patients enrolled in an HMO relative to their patients seen on a fee-for-service basis? (2) Are any reductions in testing selective or indiscriminate? We reviewed the charts of 273 new patients, 167 enrolled in a fee-for-service system and 106 enrolled in an HMO, who were seen by 17 physicians "for a check-up," and graded test use as "indicated" or "discretionary." We used multiple logistic regression to control for the effects of patient age and sex. Patients in the HMO underwent fewer tests than did patients in the fee-for-service system, as well as fewer discretionary tests, but received the same proportion of preventive services. We conclude that physicians ordered fewer tests for patients in the HMO, apparently because of selective omission of discretionary tests. Physicians also did not reduce preventive services for patients in the HMO relative to all other physicians.