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Studies Show Incentives Lower Overall Costs and Improve the Quality of Care

August 26, 2008
In a study of doctors participating in the employer-led Bridges to Excellence pay-for-performance program in Louisville, Kentucky, and Cincinnati, endocrinologists who were paid incentives had significantly lower average costs—$770 versus $1,140—for treating an episode of diabetes than those who were not paid incentives.

    Meanwhile, in California, physician groups’ clinical performance improved by 2.6 percent between 2005 and 2006, the latest year their performance was assessed, the Integrated Healthcare Association reported in February.

    Bridges to Excellence and the Integrated Healthcare Association are considered the two leading players in the pay-for-performance movement.

    Bridges to Excellence, which was started in 2003 by a group of large employers, operates in 17 states and has paid a total of $12 million in incentives to physicians since its inception.

    The Integrated Healthcare Association, which was created by California’s largest health maintenance organizations, has paid $210 million to physician groups in that state since the program was launched in 2003.

    Charles Montreuil, vice president of human resources at Minnetonka, Minnesota-based Carlson Cos., says Bridges to Excellence’s incentive payments to physicians and clinics treating his company’s employees with diabetes have led to 50 percent reductions in the cost of care for those employees.

    "We’ve seen lower overall costs in diabetes treatment," he says. "We know on average it costs $8,000 a year for a Type 2 diabetic. That can drop to $4,000 a year by channeling our people to the right practitioners, getting them towards the best outcomes."

    An analysis of the Bridges to Excellence program also found that when larger incentives are offered, doctors are more willing to participate, Bridges to Excellence CEO Francois de Brantes reported at a recent meeting of the Colorado Business Group on Health in Denver. However, the incentives have to be on par with the extra work that doctors are being asked to do, he says.

    For example, "typically, when the diabetes incentive was $2,000 per physician, we could get 10 percent to participate, but they’re usually those who are already doing well. But when you ask them to change a function," such as meeting the requirements of Bridges to Excellence’s Physician Office Link, "the reward has to be much greater," de Brantes says.

    Bridges to Excellence’s Physician Office Link focuses on the medical practice’s use of information systems to enhance quality of patient care. Its requirements range from using evidence-based standards of care to using electronic systems to maintain patient records and enter orders of prescriptions and lab tests.

    Doctors are "not stupid," he says. "If you want them to spend $30,000 or $40,000 to transform their practice, $5,000 is not enough of an incentive. We need to lay out $30,000 to $40,000 in incentives."

    A complete assessment of Bridges to Excellence’s first five years is available in a report that can be downloaded at no cost from the organization’s Web site.

    The Integrated Healthcare Association regularly reports its results on its Web site.