The Wall Street Journal-20080131-Group Offers Doctors Bonuses for Better Care

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Group Offers Doctors Bonuses for Better Care

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In an ambitious effort to shore up U.S. primary-care medicine, a coalition including General Electric Co., International Business Machines Corp. and Verizon Communications Inc. is launching an initiative to pay doctors hefty bonuses for creating "medical homes" for patients.

The initiative is the latest and perhaps most far-reaching effort by Bridges to Excellence, a program backed by big employers and health plans and a big player in the movement to provide physicians with financial incentives for taking better care of patients. Last year, the program paid out roughly $10 million in bonuses to doctors in the 18 states where it is active.

A growing number of health insurers and others, including the federal Medicare program, employ the approach to improve on certain measures aimed at raising health-care quality and lowering costs. By making sure more patients receive cholesterol screenings, diabetes checkups or pap smears, and by meeting other targets, medical practices can typically receive 2% to 6% of their revenue in bonus payments.

The new initiative would reward primary-care physicians significantly more than that, but they would be required to make much bigger changes and adopt a more integrated approach to coordinating patients' care. Such steps include following up on referrals to other physicians, systematically tracking tests, flagging abnormal results and adhering to widely accepted medical guidelines to monitor and treat diabetes and other chronic conditions.

By using such processes to improve and better coordinate care, doctors can receive $125 annual bonuses for each patient covered by a participating employer, up to a maximum $100,000 a year. Based on previous work with doctors' practices, Bridges to Excellence executives estimate such improvements in quality save $250 to $300 per patient in the first year.

"We know that in year one, the savings are there, so let's share half of that with physicians," says Francois de Brantes, the program's chief executive.

The idea is partly to help physicians finance the investments necessary to keep on top of their patients' health, such as electronic medical records. It is also intended to help reverse the sustained decline of primary care in the U.S. Struggling against rising costs and a payment system that rewards procedure-based specialist care over spending time talking to patients and basic preventive medicine, family physicians and internists increasingly have had to squeeze in more patients for less pay.

The upshot is that the average American spends fewer than 30 minutes a year with a primary-care physician -- half as much time as patients in other developed nations -- a recent study in the British Medical Journal found. Doctors say that isn't nearly enough to head off preventable health problems or manage chronic illness.

"In order to fix this mess, we have to thoughtfully reshape the payment environment," says Bruce Bagley, medical director for quality improvement at the American Academy of Family Physicians. "Right now, we're getting exactly what we're paying for."