Dr Zirui Song Discusses Early Effects of Payment Reform on Physician Behavior

Public and private payment reforms such as accountable care organization (ACO) contracts have shown some initial evidence of changes in physician behavior, but their full promise remains to be seen, according to Zirui Song, MD, PhD, resident at Massachusetts General Hospital.

Transcript (slightly modified)

How is payment reform in the United States changing physician behavior?

Payment reform has had some initial effects on physician behavior, the evidence would suggest. For example, in the Alternative Quality Contract in Massachusetts, we saw that in the initial years, physicians began to change their referral patterns, referring patients to lower-cost settings. In later years of the Alternative Quality Contract, physicians began to work more on the quantity, or volume, dimension.

Similarly, in the Medicare program, ACO contracts have been shown to be associated with changes in physician behavior on both the dimension of improving quality as well as the dimension of controlling spending, although the evidence on spending is not yet as robust or uniformly definitive as the evidence on improvements in quality measures.

When we put the 2 settings together, public ACO contracts such as in Medicare and private ACO contracts such as in the example that we looked at in Massachusetts, we can draw a lesson today that in the early stages of ACO contracts, change takes time. Change is difficult, especially when you talk about changes in actual clinical practice on the ground. It takes a well thought out approach on the part of a physician organization to translate incentives at the organizational level down to the physician level on the front lines in order to actually change practice patterns.

Despite this taking some time, we do have some initial evidence that provide cautious optimism, such as improvement in the quality measures in the contract and some evidence of slowing of medical spending. The promise of ACO contracts, and the perils of ACO contracts, will require further time for us to see fully play out. But in these initial years, I believe that it has had some impact, on average, on physician behavior.