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When incentive payments to doctors end, quality of medical care declines

May 11, 2010 |  4:02 pm

One of the best ways to improve the quality of medical care is to give doctors a financial stake in their health of their patients. Studies show that targeted monetary incentives prompt doctors to focus on specific clinical outcomes. But what happens when those incentives are removed?

Doctor British researchers wanted to know, since the government there is scheduled to stop making incentive payments based on eight indicators of clinical quality next year. So they teamed up with researchers from Kaiser Permanente to see what happened in Northern California when the health giant stopped rewarding doctors who screened patients for diabetic retinopathy and cervical cancer.

Between 1999 and 2003, when Kaiser physicians were rewarded for screening diabetic patients for diabetic retinopathy -- a complication that can cause severe vision loss, including blindness -- the screening rate rose from 84.9% to 88.1%. Then the incentive payments stopped, and the screening rate dropped to 80.5% four years later.

In the case of cervical cancer, screening rates ticked up from 77.4% to 78% between 1999 and 2000, when financial incentives were in place. Kaiser stopped the payments from 2001 through 2005, and during that time, the screening rate fell to 74.3%. That apparently caused Kaiser to reinstate the incentive payments, and the trend reversed over the next two years.

The study is being published online Wednesday by the British Medical Journal.

The results showed that doctors needed to find ways to maintain quality care for patients when financial incentives stopped, the researchers said. But that might be tricky, since it has been shown that once people get paid to do something, they’re less likely to do it for free.

-- Karen Kaplan

Photo: Targeted financial incentives help doctors focus on specific health problems -- and that focus wanes when payments stop, according to a new study. Credit: Barbara Davidson / Los Angeles Times

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Comments (6)

Next we'll be tipping our doctors for better "service" like waiters. Pretty sad!

Does anyone else see a big ethical problem in Kaiser Permanente's little "experiment" described in this article?

I've sat on several institutional review boards and I can not imagine this passing any ethical oversight group.

John and Jeff,
Go to and read the paper. The incentive payments were not to doctors and did not affect their income. It went to systems and hospitals to fund operations, programs, etc. When outcomes reached their benchmarks, they switched and measured other benchmarks. This will most likely be a large component of the Medicare "fix" over the next 4 years. Not sure that and IRB or ethical oversight group has much to do with it.

BK - good points. I'll expand:

It is utterly unethical for an "experiment" such as this to take place without the consent of those who reasonably expect their health plan to be utilizing best practices to help manage their health.

I hope that a lot of malpractice attorneys read about this specious research. Kaiser intentionally made its care algorithm worse in order to see what would happen. This is utterly irresponsible. Anyone whose screening was "missed" in the "experiment period" and was later diagnosed with advanced cervical cancer or diabetic retinopathy has a very legitimate beef with Kaiser Permanente.

Dr. Joe Selby, director of the Kaiser Permanente Northern California Division of Research and a co-author of the study, wrote in to explain that there are some clear differences between Kaiser Permanente Northern California and the National Health Service.

Within Kaiser Permanente Northern California, the incentive payments didn't go directly to the individual physicians, but to the medical facilities hwere they worked. Physician income was not directly affected.

He also said that Kaiser Permanente ended the incentives for cervical cancer and diabetic retinal screening because the rates were relatively high and incentives did not appear to be making them any higher. It was felt that there were better opportunities to improve care, such as greater focus on cardiovascular risk reduction.

Kaiser Permanente should be ashamed of their underhanded "experiment" that endangered the safety and well-being of their members. What Kaiser Permanente did violated the trust of people who believed Kaiser Permanente was looking out for their specific interests (not making them guinea pigs) and had every right to expect they would be contacted for those important screening tests.

It looks to me like Kaiser Permanente is within inches of being comparable to Tuskegee. What else Kaiser is manipulating and not telling its members?


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