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The Impact of Financial Incentives

Carolyn M. Clancy, MD; Bruce E. Hillner, MD

Arch Intern Med. 1989;149(4):917-920.

Abstract
• Incentives encouraging physicians to reduce their use of diagnostic tests are controversial. We studied physicians enrolled in an independent practitioner association who see both fee-for-sevice and prepaid (health maintenance organization [HMO]) patients concurrently. We asked the following questions: (1) Do physicians order fewer tests for their patients enrolled in an HMO relative to their patients seen on a fee-for-service basis? (2) Are any reductions in testing selective or indiscriminate? We reviewed the charts of 273 new patients, 167 enrolled in a fee-for-service system and 106 enrolled in an HMO, who were seen by 17 physicians "for a check-up," and graded test use as "indicated" or "discretionary." We used multiple logistic regression to control for the effects of patient age and sex. Patients in the HMO underwent fewer tests than did patients in the fee-for-service system, as well as fewer discretionary tests, but received the same proportion of preventive services. We conclude that physicians ordered fewer tests for patients in the HMO, apparently because of selective omission of discretionary tests. Physicians also did not reduce preventive services for patients in the HMO relative to all other physicians.

(Arch Intern Med. 1989;149:917-920)

Author Affiliations
From the Division of General Medicine and Primary Care, Department of Internal Medicine, Medical College of Virginia, Virginia Commonwealth University, Richmond.

Footnotes
Accepted for publication November 8,1988.

Read before the 10th Annual Meeting of the Society of General Internal Medicine, April 28, 1988.

Reprint requests to Box 254, MCV Station, Richmond, VA 23298-0254 (Dr Clancy).

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