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Research ArticleOriginal Research

Salary and Quality Compensation for Physician Practices Participating in Accountable Care Organizations

Andrew M. Ryan, Stephen M. Shortell, Patricia P. Ramsay and Lawrence P. Casalino
The Annals of Family Medicine July 2015, 13 (4) 321-324; DOI: https://doi.org/10.1370/afm.1805
Andrew M. Ryan
1Department of Health Management and Policy, School of Public Health, University of Michigan, Ann Arbor, Michigan
PhD
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  • For correspondence: amryan@umich.edu
Stephen M. Shortell
2Division of Health Policy and Management, School of Public Health, University of California Berkeley, Berkeley, California
PhD, MPH, MBA
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Patricia P. Ramsay
2Division of Health Policy and Management, School of Public Health, University of California Berkeley, Berkeley, California
MPH
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Lawrence P. Casalino
3Division of Healthcare Policy and Economics, Department of Health Policy and Economics, Weill Cornell Medical College, New York, New York
MD, PhD
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    Figure 1

    Composition of primary care physician compensation across study sample.

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    Figure 2

    Primary care physician compensation across financial risk and ACO participation.

    ACO = accountable care organization

    Note: Substantial risk denotes that a practice bears at least some financial risk for primary care costs for all of its health maintenance organization or point-of-service patients.

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    Table 1

    Association Between Practice Participation in ACOs, Risk for Primary Care Costs, and Primary Care Physician Compensation (N = 628)

    Independent VariablePercentage Point Change in Physician Compensation for Salary (95% CI)Percentage Point Change in Physician Compensation for Quality (95% CI)
    Does not participate in a CMS ACO program (reference)……
    Participates in a CMS ACO program−3.5 (−12.0 to 4.9)2.2 (1.4 to 2.9)a
    Does not take substantial risk for primary care costs (reference)b……
    Takes substantial risk for primary care costsb35.5 (8.5 to 62.5)c−1.0 (−3.6 to 1.5)
    Number of physicians in practice−0.02 (−0.09 to 0.04)−0.001 (−0.008 to 0.006)
    Only primary care physicians (reference)……
    Multispecialty practice−8.3 (−27.1 to 10.6)−0.1 (−3.9 to 3.7)
    Practice owned by hospital or health system (reference)……
    Practice owned by physicians−8.3 (−15.4 to −1.1)c−8.0 (−11.5 to −4.6)a
    Practice owned by other groupd−13.0 (−59.7 to 33.8)−6.9 (−13.4 to −0.4)c
    Percentage of patients whose primary language is not English0.5 (0.4 to 0.6)a−0.04 (−0.09 to 0.01)
    • ACO = accountable care organization; CMS = Centers for Medicare and Medicaid Services; HMO = health maintenance organization.

    • Note: Estimates are from linear regression models, incorporating the survey design.

    • ↵a P <.01

    • ↵b Defined by whether practices have some financial risk for all of their point-of-service patients.

    • ↵c P <.05

    • ↵d HMO or insurance entity, nonphysician managers, other.

Additional Files

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    Supplemental Appendix 1. Supplemental Analysis

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    • Supplemental data: Appendix - PDF file
  • The Article in Brief

    Salary and Quality Compensation for Physician Practices Participating in Accountable Care Organizations

    Andrew M. Ryan , and colleagues

    Background There are many questions about how Accountable Care Organizations (ACOs)should be structured. This study examines one such structural issue: the approach practices in ACOs use to compensate primary care physicians.

    What This Study Found Compensation arrangements for primary care physicians in ACOs are similar to those in practices that assume substantial risk for primary care costs. Based on physicians' compensation as the percentage of compensation based on salary, productivity, clinical quality or patient experience, and other factors, primary care physicians in ACO practices on average receive 49 percent of compensation from salary, 46 percent from productivity, 3 percent from quality and 2 percent from other factors. Physicians not in ACOs but with substantial risk for primary care costs receive two-thirds of their compensation from salary, nearly one-third from productivity and slightly more than 1 percent from quality and other factors. Although ACO practices provide higher compensation for quality compared with practices at large, they provide a similar mix of compensation based on productivity and salary.

    Implications

    • According to the authors, incentives for ACOs may not be sufficiently strong to encourage practices to change physician compensation policies for better patient experience, improved population health, and lower per capita costs.
  • Correction

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The Annals of Family Medicine: 13 (4)
The Annals of Family Medicine: 13 (4)
Vol. 13, Issue 4
July/August 2015
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Salary and Quality Compensation for Physician Practices Participating in Accountable Care Organizations
Andrew M. Ryan, Stephen M. Shortell, Patricia P. Ramsay, Lawrence P. Casalino
The Annals of Family Medicine Jul 2015, 13 (4) 321-324; DOI: 10.1370/afm.1805

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Salary and Quality Compensation for Physician Practices Participating in Accountable Care Organizations
Andrew M. Ryan, Stephen M. Shortell, Patricia P. Ramsay, Lawrence P. Casalino
The Annals of Family Medicine Jul 2015, 13 (4) 321-324; DOI: 10.1370/afm.1805
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