Quality Incentives Tied to Compensation

One-Third of Early Adopters Have More Than 10% of Provider Compensation Tied to Quality

November 16, 2015

MINNEAPOLIS–(BUSINESS WIRE)–As the health care industry continues to shift its focus from volume to value, physician and advanced practice clinician compensation arrangements are following suit. Aligning provider pay with performance remains an ongoing challenge, and requires unique insight into quality performance measures and value-based incentive plan design. The Provider Performance Incentive Survey from Sullivan, Cotter, and Associates, Inc. (SullivanCotter) is the first of its kind as it focuses exclusively on non-productivity measures, and is a comprehensive source of data on emerging performance trends and incentive design practices.

In the 2014 survey, information was collected from a hand-selected group of over 30 large multi-specialty medical groups and health systems who are ahead of the curve in incorporating quality measures into their provider incentive plans. These organizations reported on more than 20 specialties and provided details on over 350 different performance measures. The results showed that 33% of these organizations have more than 10% of compensation associated with value- and quality-based performance measures.

“Value-based compensation and payment arrangements continue to evolve as the focus on rewarding value over volume is increasing. In the next five years, we expect approximately 80% of organizations to have more than 10% of physician compensation tied to quality measures, a large percentage of which will be ‘at risk’. Understanding these upward trends in value-based incentive measures are key to aligning provider pay and performance,” said Brad Vaudrey, Managing Principal, SullivanCotter.

68% of the organizations surveyed reported that they have quality incentives tied to compensation as a core component for all specialties, whereas 32% indicated that quality measures are currently only associated with select specialties. Additionally, 58% have incorporated quality metrics into their advanced practice clinician incentive plans as well.

Primary care specialties continue to see an increasing percentage of their total cash compensation attributed to quality and value measures, which averaged 6% in 2014. These compensation arrangements are split evenly between ‘at-risk’ pay, bonus pay, or a combination of the two. Organizations reported that primary care specialties such as in Internal Medicine and Family Medicine, at 94% and 90% respectively, are among those with the greatest prevalence of quality measures integrated into their compensation plans. The most commonly reported measures within these specialties relate to patient experience and patient access. Other top measures reported consist of preventative/chronic health issues including diabetes, heart disease, and mental health, tobacco cessation counseling, and readmission rates (unexpected return for previously performed services).

“The demand for delivering value-based care is central to the health care debate. Organizations are transitioning from fee-for-service, volume-based productivity measures to delivering the highest quality care, the best patient experience, and a more affordable health care product by incorporating more value-based measures into their provider performance incentive plans,” said Dr. Jeff Weisz, Managing Principal and Consulting Physician, SullivanCotter.

The 2015 Provider Performance Incentive Survey is now open for wider participation, and includes detailed performance data collection organized by specialty. Performance measures are collected based on the individual physician, as well as the department or clinical team, and are reported by weight, percentage of pay at risk, market utilization, frequency of use and more.

The deadline to participate is December 18, 2015. Survey participants will receive complimentary electronic copies of the survey report and data tables, released in February 2016.

For more information on SullivanCotter’s surveys, please visit our website at stage.sullivancotter.com/surveys360 or contact us by phone at 888.739.7039.

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