Boosting volume key to higher doctor pay despite value-based care push, study shows

Doctors employed by health system-owned practices are paid mostly for the amount of services they provide, even as payers strive toward value-based care, the RAND Corp. reports in a new study.

The findings, published on JAMA Health Forum Friday, show that volume counted towards compensation for 83.9% of primary care physician organizations and 93.3% of specialty organizations. Performance-based initiatives averaged less than 10% of compensation for the practices surveyed.

Alternative payment models have been picking up steam since the Affordable Care Act became law in 2010. Last year, the Centers for Medicare and Medicaid Services set a goal to move all Medicare enrollees and most Medicaid beneficiaries into value-based care arrangements by 2030.

But physician compensation models aren’t keeping up. Health systems are still encouraging physicians to deliver more services in order to maximize revenue, the RAND Corp. survey found.

RAND Corp. researchers spoke to providers at 31 physician organizations affiliated with 22 health systems in four states between November 2017 and July 2019. Volume was the most common revenue strategy for those providers, with 26 primary care compensation models and 28 specialist models paying doctors based on the number of services rendered.

Volume comprised more than 68% of primary care physician compensation and nearly 74% of specialist pay, on average.

The primary care models included quality and cost performance-based incentive payments, but those averaged a total of 9% of income. Only 17 specialist compensation models paid providers based on performance, and those payments averaged 5.3% of overall compensation.

Capitation and salary were also seen in several payment models but were less common than volume- and value-related models.

Out of 30 physician organizations that completed survey, 21 reported that higher volume is the most common way physicians can make more money. Improving clinical quality was the next most-reported strategy.

These findings show that value-based payments likely aren’t doing enough to make a difference in quality of care, the RAND Corp. concludes.

“The modest size of these quality and cost performance incentives for [primary care physicians] and specialists compared with the base compensation incentives suggest that their potential to change behavior is likely to be marginal,” the study says.

Maximizing volume also maximizes health system revenues, the RAND Corp. researchers wrote.

In order to push health systems—and the providers who work at them—into alternative payment models, they need assurance they can make more money than they would from generating volume, said Ashley Ridlon, vice president of health policy at Evolent Health, a firm that helps payers and providers improve their care delivery.

“We’ve begun to kind of change physicians’ mindsets around how they’re getting paid. But I think we still have a long way to go,” said Ridlon, who wasn’t involved in the study. “Those that are participating in value-based care models need to share more about the compensation model and what really works to change behavior.”

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