Health care plans sign on to rating system for doctors

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San Francisco Chronicle

A coalition of California health plans, employers and physician groups announced an effort yesterday designed to improve the quality of health care by paying doctors more for better performance.

The concept isn’t new. In fact, most health plans say they have systems in place to rate, and in some cases, reward physicians for good results. What’s different in this case is the developers of this initiative managed to get six major health plans and the medical groups they contract along with major employers to agree on a common system to rate performance.

“What we’re producing here is a common, single report card. That’s huge,” said Steve McDermott, head of Hill Physicians, a large medical group based in San Ramon, and chair of the board for the Integrated Healthcare Association, the coalition that developed this pay-for- performance system.

“Neither fee-for-service, which is the predominant form of payment in the United States for doctors, nor capitation, which is the predominant form in California, reward performance or quality,” said McDermott.

Capitation is paying for medical care on a per-patient basis and only doctors in captitated managed care plans will be eligible for this new program.

This plan to reward doctors for quality and patient satisfaction rather than just for cutting costs comes at a time of premium increases, fueled by skyrocketing prescription drug and hospital costs, and a public backlash against managed care. Rising premiums are also causing employers to shift some costs to employees.

Critics of the initiative, the details of which are still be worked out, are concerned that health plans will be shifting money within an already strapped system rather than injecting new funds.

The participating health plans represent the state’s major HMOs: Aetna Inc.,

Blue Cross of California, Blue Shield of California, Cigna Corp., Health Net of California and PacifiCare Health Systems Inc.

Kaiser Permanente, the state’s largest health maintenance organization, was not included because, unlike the other plans that contract with a variety of physician groups, Kaiser has an exclusive agreement with doctors. Kaiser spokesman Jim Anderson said for at least six years the HMO has based 3 to 5 percent of physician pay on clinical quality and service and access measures.

The coalition estimates the new standard will affect 35,000 doctors in California’s 300 medical groups who serve more than 8 million HMO members.

It’s still unclear how much each plan will contribute to the effort, but the coalition says about $100 million a year will be available to the state’s medical groups. Just how much of that trickles down to the individual doctor is up to the medical group.

And, of course, how much each group earns will depend on how well they perform on the various points of measurement.

The scorecard consists of a number of nationally recognized health rating systems including chronic care for asthma, diabetes and heart disease and preventive care that includes child immunizations, breast cancer and cervical screening. Up to 50 percent of the total score will be based on customer satisfaction.

Beau Carter, director of the Integrated Healthcare Association in Walnut Creek, said it will begin phasing in the plan this year and have it fully operational for all six plans by 2003. Although the plan initially will be limited to HMOs, Carter said he hopes it can be extended to Medi-Cal and eventually Medicare managed care plans.

“Employers are very supportive of this initiative because we are in a place where we’re seeing double-digit premium increases,” said Peter Lee, head of the Pacific Business Group on Health, a health care purchasing coalition for major employers.

But the California Medical Association, which represents about half of the state’s licensed doctors, said it supports quality initiatives but is concerned this plan leaves it up to the health plans whether they create new money for the bonus program or just shift funds for other services to the program.

“The major problem is, where’s the money coming from?” said CMA spokesman Peter Warren. The plans “need to take the premium increases and pass it down to the physicians, who are beleaguered, and the rest of the strapped delivery system.”

Yesterday’s move follows Blue Cross‘ decision in July to contribute as much as 10 percent of its capitation payments to a similar bonus plan. Spokesman Michael Chee said that the Blue Cross program will be integrated into the standardized model.

Blue Shield, based in San Francisco, instituted a performance program about a year ago in which it contributes about 5 percent of its professional fees to physician bonuses.

One consumer watchdog group criticized the program for failing to address what it considers the real problem — a system that banks on healthy patients subsidizing the sicker ones.

“If HMOs really wanted to improve health quality, they would pay doctors more to treat sick patients than they do to treat well patients,” said Jamie Court, executive director of the Foundation for Taxpayer and Consumer Rights.

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