The influence of provider characteristics and market forces on response to financial incentives

Am J Manag Care. 2017 Nov;23(11):662-667.

Abstract

Objectives: Alternative payment models, such as accountable care organizations, use financial incentives as levers for change to facilitate the transition from volume to value. However, implementation raises concerns about adverse changes in market competition and the resultant physician response. We sought to identify physician characteristics and market-level factors associated with variation in response to financial incentives for cancer care that may ultimately be leveraged in risk-shared payment models.

Study design: Retrospective cohort study of physicians providing minimally invasive bladder cancer procedures to fee-for-service Medicare beneficiaries.

Methods: We examined the relationship of between-group differences in market-level factors (competition [Herfindahl-Hirschman Index (HHI)] and provider density) and physician-level factors (use of unique billing codes, number of billing codes per patient, and competing financial interest) to responsiveness to financial incentives.

Results: Incentive-responsive providers had increased odds (odds ratio [OR], 1.19; 95% CI, 1.04-1.35) of practicing in markets with the highest quartile of provider density but not HHI (OR, 0.96; 95% CI, 0.87-1.05). Incentive-responsive providers were more likely to bill in the highest quartile for unique codes (OR, 1.49; 95% CI, 1.32-1.69) and codes per patient (OR, 1.18; 95% CI, 1.11-1.25) and less likely to have a competing financial interest (OR, 0.76; 95% CI, 0.72-0.81).

Conclusions: Responsiveness to financial incentives in cancer care is associated with high market provider density, profit-maximizing billing behavior, and lack of competing financial ownership interests. Identifying physicians and markets responsive to financial incentives may ultimately promote the successful implementation of alternative payment models in cancer care.

MeSH terms

  • Cystoscopy
  • Economic Competition / statistics & numerical data*
  • Fee-for-Service Plans
  • Humans
  • Medicare
  • Motivation*
  • Patient Satisfaction
  • Physicians / economics
  • Physicians / statistics & numerical data*
  • Practice Patterns, Physicians' / statistics & numerical data*
  • Reimbursement, Incentive / statistics & numerical data*
  • Residence Characteristics / statistics & numerical data
  • Retrospective Studies
  • United States
  • Urinary Bladder Neoplasms / surgery