In a large, geographically diverse sample of managed care enrollees with diabetes and their physicians, we found inconsistent associations between physician reimbursement perceptions and procedure performance. Reimbursement perception for electrocardiograms was associated with more frequent test performance, but reimbursement perceptions for other tests were not associated with test performance. We found little change in these patterns after adjustment for physician characteristics and patient covariates. Our findings lend support to previous work from the 1980s suggesting that reimbursement perception is test-specific, and that any associations with test performance are limited to electrocardiograms.6, 7
Our findings are also accord with previous work suggesting that report of compensation and performance of diabetes care measures such as urine microalbumin and hemoglobin A1c are not tightly linked.1, 17, 18
Earlier diabetes health services research examining associations between reimbursement and test performance consists of: 1) the previously cited comparisons of reimbursement perceptions for outpatient tests among fee-for-service and salaried physicians,6, 7
2) comparisons of diabetes quality of care in fee-for-service and salaried settings,1, 17, 18
and 3) structured interventions based on financial incentives.21–23
After adjustment for potential confounding characteristics of healthcare organizations, actual reimbursement does not appear to be strongly related to diabetes quality of care.1, 17, 18
Comparisons of fee-for-service and salaried organizations in terms of diabetes measures have also shown that fee-for-service organizations may provide poorer quality of diabetes care, suggesting that fee-for-service reimbursement for these measures may not be sufficient to increase procedure rates. To date, structured interventions based on financial incentives, or pay-for-performance initiatives, have had minimal to moderate effects.21–23
Our study examined physician reimbursement perceptions
, which may more accurately reflect physician decision-making about test-ordering than actual reimbursement. In their examination of a pay-for-performance initiative, Hillman and colleagues found that little association existed between physician incentives for vaccination and vaccination rates, and little association existed between physician incentives for cancer screening and cancer screening rates. They found that most of the physicians in the program were not aware of the initiatives, and hence the initiatives did not affect their practices.10, 11
The average incentives to physicians in a particular group may not be the same as incentives faced by any individual physician. In addition, physicians respond to the incentives they perceive to be in effect, even if their perception is incorrect. Thus, physician reimbursement perceptions may more accurately reflect reimbursement effects than actual reimbursement. By asking physicians directly whether they perceived reimbursement, we measured this influence on test-ordering closest to the source.
Our report has several limitations. We enquired after perceptions of reimbursement, but we did not enquire about the perceived amount of reimbursement. Thus, this may have biased our results to the null. We did not measure particular aspects of reimbursement, such as perceived reimbursement for reading radiographs vs. performing radiographs vs. downstream profits from ownership of radiograph facilities, as we were interested in the broad category of reimbursement. However, it is possible that specific subtypes of reimbursement are more closely associated with testing behavior. We did not enquire about each plan’s reimbursement policies, and it is possible that physicians tailor their test-ordering practices according to the patient’s health plan. As physician groups often contract with a number of plans, we reasoned that it would be difficult for physicians to quantify the proportions of patients enrolled in a health plan and the compensation for particular procedures associated with each plan. If such tailoring occurs, it would also have biased our results towards the null. We enquired after reimbursement perceptions after the observation period, and it is possible that reimbursement schemes changed in the time between our survey and the period during which tests were performed. Finally, we measured all of the procedures ordered for a particular patient, but we only assessed perceptions of reimbursement for the primary care physician. Therefore, it is possible that other physicians than those surveyed ordered procedures, thus biasing our results to the null.
We conclude that in managed care, perceptions of reimbursement for particular outpatient procedures have inconsistent associations with test-ordering among primary care physicians who care for patients with diabetes. Associations may exist for electrocardiograms but not for recommended diabetes care measures such as urine microalbumin or HbA1c, screening measures such as Pap smears, or other diagnostic tests such as radiographs. Further research is needed to determine whether larger incentives combined with greater physician detailing have a greater impact on test-ordering, how such associations vary as reimbursement levels change, and how perception of reimbursement interacts with other influences upon test-ordering behavior, such as appropriateness of tests.