[New York Times] In a bold experiment in performance pay, complaints from patients at New York City’s public hospitals and other measures of their care — like how long before they are discharged and how they fare afterward — will be reflected in doctors’ paychecks under a plan being negotiated by the physicians and their hospitals.
The proposal represents a broad national push away from the traditional model of rewarding doctors for the volume of services they order, a system that has been criticized for promoting unnecessary treatment. In the wake of changes laid out in the Affordable Care Act, public and private hospitals are already preparing to have their income tied partly to patient outcomes and cost containment, but the city’s plan extends that financial incentive to the front line, the doctors directly responsible for treatment. It also shows how the new law could change longstanding relationships, giving more power to some of the poorest and most vulnerable patients over doctors who run their care.
“I would expect that we’re going to see this become more and more prevalent in compensation arrangements,” said Alan Aviles, president of the city’s Health and Hospitals Corporation, which runs the city’s 11 public hospitals and is the country’s largest public health system, handling more than 1 million emergency room visits a year.
The corporation’s plan would make doctors’ raises dependent on their performance on quality measures. The details are being negotiated with the doctors’ union, but both sides expect to reach an agreement that incorporates the idea.
Still, doctors are hesitant, saying they could be penalized for conditions they cannot control, including how clean the hospital floors are, the attentiveness of nurses and the availability of beds.
And it is unclear whether performance incentives work in the medical world; studies of similar programs in other countries indicate that doctors learn to manipulate the system.
“The consequences in a complex system like a hospital for giving an incentive for one little piece of behavior are virtually impossible to foresee,” said Dr. David U. Himmelstein, professor of public health at the City University of New York and a visiting professor at Harvard Medical School, who has reviewed the literature on performance incentives. “There are ways of gaming it without even outright lying that distort the meaning of the measure.”
Over the next few years, the federal government will financially reward or penalize hospitals based on how they perform on benchmarks that are believed to be correlated with better patient outcomes. By aligning doctors’ pay to the same benchmarks, city hospitals hope to perform well enough to qualify for federal bonuses.
Under the proposal, bonuses of up to $59 million over the next three years would be distributed to about 3,300 doctors, and would be given to physicians as a group at each hospital, rather than as individuals, so that even the worst doctor would benefit. They would amount to up to 2.5 percent of salaries, which range from about $140,000 for entry-level primary-care physicians to $400,000 for experienced specialists.
Dr. Bruce Siegel, president of the National Association of Public Hospitals and Health Systems and a former head of the hospitals corporation, called the plan “unprecedented for American public hospitals, in terms of scale, in terms of moving us into a new model.”
Los Angeles County, which has the nation’s second-largest public health system after New York, does not have anything similar, said Dr. Anish Mahajan, director of system planning for the Los Angeles County Department of Health Services. “What an intriguing idea,” Dr. Mahajan said. “That’s something we would hold out as a potential thing we do in the future.”
Administrators at several private New York hospitals said they were considering incorporating the federal benchmarks into their salary structures, but have not yet done so on a significant scale.
The public hospital system has come up with 13 performance indicators. Among them are how well patients say their doctors communicate with them, how many patients with heart failure and pneumonia are readmitted within 30 days, how quickly emergency room patients go from triage to beds, whether doctors get to the operating room on time and how quickly patients are discharged.
Union officials said they were still fighting for wage increases, in addition to performance bonuses. The union has also proposed expanding the indicators to 20, including measures that would give doctors bonuses for going to community meetings, giving lectures, getting training during work hours, screening patients for obesity and counseling them to stop smoking. It has also proposed excluding some patients — like developmentally disabled patients, homeless people and those who have no place to go — from incentives aimed at reducing the time patients spend in the hospital.
A union official, who spoke on the condition of anonymity so as not to upset negotiations, said doctors considered the proposal demeaning. “To say we’ll stick a carrot in front of you and therefore you’re going to be a better doctor is a little disingenuous,” he said.
In a written statement, Dr. Barry Liebowitz, the president of the union, the Doctors Council S.E.I.U., said it supported performance incentives in theory, if they “will improve patient care.” But he called for a team approach and hinted that the union would demand more doctors and support staff.
The traditional physician incentive payments, tied to the income they generate for hospitals, have been roundly blamed in recent years for driving up costs. (The hospitals corporation had not used these incentives but, in some cases, had required doctors’ groups to meet minimums for billing.) Studies have found that they can lead to excessive testing and “upcoding,” or diagnosing ailments as worse than they really are, to justify more patient treatment and higher payments. Mr. Aviles said the corporation’s plan would not tie payment to the volume or intensity of care.
But Dr. Himmelstein said there were still hazards in the city’s plan. He said that when primary-care doctors in England were offered bonuses based on quality measures, they met virtually all of them in the first year, suggesting either that quality improved or — the more likely explanation, in his view — “they learned very quickly to teach to the test.”
“I think the most interesting finding is, things that were not measured, in a few studies, appeared to have gotten a bit worse,” Dr. Himmelstein said. For instance, patients were not as likely to stick with the same doctor, possibly because they were encouraged to see whichever doctor was available — speed was one quality measure — rather than the doctor who might know them best. In another example, while the doctors reported that they had controlled blood pressure in virtually all their patients, a random survey showed no downward trend in blood pressure or strokes.
There could have been any number of ways of outsmarting the system, he said: “If you take blood pressures three times and report the lowest, is that lying or merely tipping the numbers in your favor?”
Dr. Himmelstein also said doctors could try to avoid the sickest and poorest patients, who tend to have the worst outcomes and be the least satisfied. But physicians within the public hospital system have little ability to choose their patients, Mr. Aviles said. He added that he did not expect the doctors to act so cynically because, “in the main, physicians are here because they are attracted to that very mission of serving everybody equally.”