Disclosing Doctors’ Incentives James G. Anderson, Ph.D. Purdue University

Physicians’ Payment Arrangements Traditional or fee-for-service: Payment for each visit, test, and procedure provided. Managed care or capitation: Fixed monthly payment to provide health care services for patients who access the system through the physician. Salary: Payment of a fixed yearly amount.

Legislation 1994 AMA revised the Code of Ethics to state that MDs should advise their patients of financial incentives. 1997 8th Circuit Court of Appeals ruled under ERISA that health plans must disclose financial incentives for MDs. 1998 28states required disclosure of financial incentives for MDs. 2000 5th Circuit Court of Appeals ruled that health plans do not have to disclose financial incentives for MDs.

Arguments for Disclosure by Health Plans Enhances choice of plan by consumers Helps enrollees to understand how incentives affect access and treatment decisions. Encourages plans to develop physician compensation methods that enhance quality of care.

Arguments for Disclosures by Doctors Satisfies physicians’ fiduciary duty to patients. Promotes patient autonomy. Preserves physicians integrity and the patient relationship. Discourages physicians from entering into financial arrangements detrimental to patients.

Arguments against Disclosure Financial incentives under managed care plans are complex and difficult for the patient to understand. Little research on how physicians’ financial incentives affect quality of care. Disclosure of financial incentives may lower patients’ trust in their physicians.

Patients who Correctly Identified their Physician’s payment Method

Other Studies of Knowledge of Physicians’ Financial Incentives Only 50% of enrollees wanted information about incentives 37% of enrollees did not understand capitation 25% of enrollees in HMOs or PPOs did not know their choice of a provider was limited. Only about 33% of Medicare beneficiaries believed financial incentives influence physicians’ behavior. 84% of patients trusted their physicians to put patients’ interests first.