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Quality of health care only factors into 11 percent of payments to doctors, hospitals

A new analysis says only 11 percent of payments to doctors and hospitals are
A new analysis says only 11 percent of payments to doctors and hospitals are "value-oriented," or tied to the quality of the health care that's been provided.
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By the beginning of 2015, payments to doctors will start being tied to the quality of the care they provide – not the volume.

As it stands, the U.S. isn't doing a very good job of that – not at least according to the National Scorecard on Payment Reform.

The scorecard, released by the Catalyst for Payment Reform (CPR), says that only 11 percent of payments to doctors and hospitals in today's commercial sector are "value-oriented," or tied to quality of care. As far as the rest of those payments, said CPR in a statement:

Almost 90 percent of payments reported remain in traditional fee-for-service, paying providers for every test and procedure they perform, regardless of necessity or outcome…

Either that, said the CPR, or providers are given "capitated" payments – a fixed payment per patient – but still without any incentive to provide good, high-quality care.

One issue with fee-for-service is that it can quickly become both wasteful and expensive, particularly when it comes to medical tests or procedures that aren't really necessary. The American Board of Internal Medicine has tackled that issue with its Choosing Wisely campaign, which has highlighted 135 tests and procedures (so far) that it says are often unnecessary and, in some cases, even harmful.

CPR has set a goal that by 2020, 20 percent of payments to doctors and hospitals in the commercial sector be value-oriented, which means it has about seven years to improve its current standing.

The scorecard also contains hints as to why there may be a primary care provider shortage in the U.S., even as new health care reform provisions that will drastically expand access to health care services loom: CPR says despite federal attempts to prioritize primary care, of the total payments made by patients, 75 percent go to specialists, while just 25 percent go to their primary care counterparts.

Medscape's latest physician compensation survey illustrates what may be one reason why: Specialist doctors easily outearn those in the field of primary care. While cardiologists pull an average annual income of about $314,000 a year, for example, a doctor who works in family medicine can expect to make around half of that – $158,000 a year.