Measuring the effects of managed care on physicians' perceptions of their personal financial incentives

Using data from the 1997 Resurvey of Young Physicians (N = 1,549), this stu dy examines whether several measures of physicians' contractual arrangement s with health plans are associated with their perceptions of overall financ ial incentives to either decrease or increase the volume of services to pat ients. Results indicate the following factors were significantly associated with an increased likelihood of reporting an incentive to decrease service s: a gatekeeper arrangement with a compensation incentive; the perception o f a high risk of plan deselection for physicians with high costs; the perce ption that referrals received depended on the costs of care provided; commu nication prohibiting or discouraging the disclosure to patients of the phys ician's financial relationship with the health plan; receiving capitation p ayments from at least one plan; and employment in a health maintenance orga nization. Being compensated on a fee-for-service basis or receiving a salar y with incentive or bonus provisions (compared to straight salary) were ass ociated with an increased likelihood of reporting an incentive to increase services to patients. Physicians' overall methods of compensation had a rel atively small impact on their perceived financial incentives compared to ot her statistically significant factors. Our findings suggest that physicians ' self-reported, overall personal financial incentives within their practic es are a valid summary measure of the heterogeneous mix of specific financi al arrangements faced by most physicians.