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- W2008651979 abstract "Managed care has become the dominant delivery system in many areas of the United States. Nearly three fourths of privately insured Americans now receive network-based health care through health maintenance organizations (HMOs), preferred provider organizations (PPOs), and various point-of-service hybrid arrangements.1 Physicians receive over one third of their revenue from managed care, and more than one third of physicians receive some revenue from capitated contracts.2Of managed care's many features, financial incentives to physicians have received the most attention.3 Particular attention has been focused on HMOs that use risk-based capitation financing. Such financing arrangements encourage prevention and cost-effective practice, but also have the potential to discourage care that may be medically appropriate, especially if the omission of such care is unlikely to lead to other negative consequences (e.g., enrollment turnover because of dissatisfaction, revenue losses associated with malpractice cases). Policy makers are concerned that payment incentives confronting individual physicians under some managed care arrangements may distort physicians' clinical judgment.4Health maintenance organizations vary in how much they rely on financial incentives for cost control, both alone and in combination with other mechanisms, such as utilization review and prior approval policies or broader organizational design aimed at changing physician orientation. Hillman has characterized the balance between these two approaches as the difference between incentives and rules.5 Despite some variation, virtually all HMOs depend at least in part on financial incentives using techniques like capitation, withheld funds, and bonuses.This article discusses the current use of financial incentives in managed care. It is organized in three parts. The first part is conceptual and includes general assumptions about financial incentives and their role in managed care, a framework to provide context for them, and four key variables to use in defining the form of financial incentives. The second part is empirical and presents findings from a recent national survey of managed care plans to illustrate how incentives are structured in managed care and the organizational context in which they operate. The third part presents the observations of the author, a nonclinician researcher, and highlights key challenges facing the medical community as it decides how to respond to managed care.Effects of financial incentives in managed care will not be discussed. Though there are several review articles on the performance of managed care, studies focused on the effects of different methods of paying physicians in managed care plans are rare.3,6–8 Rapid change in managed care organizations as well as physician involvement in a number of different health plans present substantial barriers to these types of studies. As a result, most studies have not isolated the effects of financial incentives on physician behavior from effects attributable to organizational or individual physician factors." @default.
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- W2008651979 date "1999-01-01" @default.
- W2008651979 modified "2023-09-23" @default.
- W2008651979 title "Financial incentives" @default.
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- W2008651979 doi "https://doi.org/10.1046/j.1525-1497.1999.00260.x" @default.
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