Effect of Financial Bonus Size, Loss Aversion, and Increased Social Pressure on Physician Pay-for-Performance: A Randomized Clinical Trial and Cohort Study

Abstract

Importance: Despite limited effectiveness of pay-for-performance (P4P), payers continue to expand P4P nationally.

Objective: To test whether increasing bonus size or adding the behavioral economic principles of increased social pressure (ISP) or loss aversion (LA) improves the effectiveness of P4P.

Design, setting, and participants: Parallel studies conducted from January 1 to December 31, 2016, consisted of a randomized clinical trial with patients cluster-randomized by practice site to an active control group (larger bonus size [LBS] only) or to groups with 1 of 2 behavioral economic interventions added and a cohort study comparing changes in outcomes among patients of physicians receiving an LBS with outcomes in propensity-matched physicians not receiving an LBS. A total of 8118 patients attributed to 66 physicians with 1 of 5 chronic conditions were treated at Advocate HealthCare, an integrated health system in Illinois. Data were analyzed using intention to treat and multiple imputation from February 1, 2017, through May 31, 2018.

Interventions: Physician participants received an LBS increased by a mean of $3355 per physician (LBS-only group); prefunded incentives to elicit LA and an LBS; or increasing proportion of a P4P bonus determined by group performance from 30% to 50% (ISP) and an LBS.

Main outcomes and measures: The proportion of 20 evidence-based quality measures achieved at the patient level.

Results: A total of 86 physicians were eligible for the randomized trial. Of these, 32 were excluded because they did not have unique attributed patients. Fifty-four physicians were randomly assigned to 1 of 3 groups, and 33 physicians (54.5% male; mean [SD] age, 57 [10] years) and 3747 patients (63.6% female; mean [SD] age, 64 [18] years) were included in the final analysis. Nine physicians and 864 patients were randomized to the LBS-only group, 13 physicians and 1496 patients to the LBS plus ISP group, and 11 physicians and 1387 patients to the LBS plus LA group. Physician characteristics did not differ significantly by arm, such as mean (SD) physician age ranging from 56 (9) to 59 (9) years, and sex (6 [46.2%] to 6 [66.7%] male). No differences were found between the LBS-only and the intervention groups (adjusted odds ratio [aOR] for LBS plus LA vs LBS-only, 0.86 [95% CI, 0.65-1.15; P = .31]; aOR for LBS plus ISP vs LBS-only, 0.95 [95% CI, 0.64-1.42; P = .81]; and aOR for LBS plus ISP vs LBS plus LA, 1.10 [95% CI, 0.75-1.61; P = .62]). Increased bonus size was associated with a greater increase in evidence-based care relative to the comparison group (risk-standardized absolute difference-in-differences, 3.2 percentage points; 95% CI, 1.9-4.5 percentage points; P < .001).

Conclusions and relevance: Increased bonus size was associated with significantly improved quality of care relative to a comparison group. Adding ISP and opportunities for LA did not improve quality.

Trial registration: ClinicalTrials.gov Identifier: NCT02634879.

Conflict of interest statement

Conflict of Interest Disclosures: Dr Navathe reported receiving grants from the Commonwealth Fund and Robert Wood Johnson Foundation during the conduct of the study; grants from Hawaii Medical Services Association, Anthem Public Policy Institute, Oscar Health, and CIGNA Corporation; personal fees from Navvis and Company, Navigant, Inc, Lynx Medical, Indegene, Inc, Sutherland Global Services, Elsevier Press, Navahealth, Cleveland Clinic, and Agathos, Inc; and serving as an uncompensated board member from Integrated Services, Inc, outside the submitted work. Dr Volpp reported receiving grants from the Commonwealth Fund and Robert Wood Johnson Foundation during the conduct of the study; personal fees from CVS Health and VAL Health; equity from VAL Health; and grants from Hawaii Medical Services Association, Vitality/Discovery, Humana, Merck, and Weight Watchers outside the submitted work. Dr Patel reported receiving grants from Commonwealth Fund during the conduct of the study. Dr Shea reported receiving grants from the National Institutes of Health, National Heart, Lung, and Blood Institute, and Accreditation Council for Graduate Medical Education during the conduct of the study and outside the submitted work. Dr Crawford reported ownership interest in Associates in Nephrology, SC, and Research by Design, LLC. Dr Emanuel reported speaking fees from Leigh Bureau Bill Leigh/Jennifer Bowen; serving as a CNN consultant and contributor; investments in Oak HC/FT Venture Fund II, Applecart Project, Maniv, Silver Lake, United Health Group, Gilead, Allergan, Amgen, Baxter, and Medtronics; membership on the Council on Foreign Relations; serving as senior fellow for the Center for American Progress; contributing to the New York Times; serving as a board member to the Yale Open Data Access Program and the JAMA editorial board; compensated speaking engagements for J. P. Morgan Chase, University of Michigan, Ann Arbor, CVS Caremark, National Council for Behavioral Health, Sound Physicians, Merrill Lynch & Co, Inc, Marcus Evans, Inc, Klick Health, Entrée Health, American Health Lawyers Association, Athenahealth, AmeriHealth Caritas Family of Companies, McKesson Corporation, Valence Health, North Texas Specialty Physicians, Gerontological Society of America, Federacao Nacional Das Empresas de Seguros Privados, de Capitalizacao e de Previdencia Complementar Aberta-Fenaseg, Advocate Health Care, OrthoCarolina Annual Physician Retreat, Tanner Healthcare System, Mid-Atlantic Permanente Group, American College of Radiology, Marcus Evans Long-Term Care & Senior Living Summit, Loyola University Chicago, Oncology Society of New Jersey, Good Shepherd Community Care, Remedy Partners, Medzel, Kaiser Permanente Virtual Medicine, Wallace H. Coulter Foundation, Lake Nona Institute, Allocation, Partners Chicago, Pepperdine University, Huron 2017 CEO Forum, American Case Management Association, Chamber of Commerce, Blue Cross Blue Shield Minneapolis, United Health Group, Futures Without Violence, Children’s Hospital of Philadelphia (CHOP) Drug Pricing, Washington State Hospital Association, Association of Academic Health Centers, State Administration of Foreign Affairs, Blue Cross/Blue Shield of Massachusetts, Inc, Lumeris, CHOP, Roivant Sciences, Inc, Transformational Institute, Medical Specialties Distributors, LLC, Vizient University Health System Consortium, Center for Neurodegenerative Research Alzheimer’s Disease Center, United Health, Genentech Oncology, Inc, Council of Insurance Agents and Brokers, America’s Health Insurance Plans, Montefiore Physician Leadership Academy Launch, Medical Home Network, Healthcare Financial Management Association, Ecumenical Center–UT Health, American Academy of Optometry, Associação Nacional de Hospitais Privados, National Alliance of Healthcare Purchaser Coalitions, Optum Labs, Massachussetts Association of Health Plans, and District of Columbia Hospital Association; and uncompensated speaking engagements for the Board of Women Visitors Meeting (Mission of Healthcare), University of California, San Francisco, Philadelphia Aspen Challenge, National Business Group on Health, Consortium of Universities for Global Health, Berjen University, Delaware Healthcare Spending Benchmark Summit, American Academy of Ophthalmology (Geisinger: From Crisis to Cure), National Institute for Health Care Management, Berjen University, MCW Commencement, and RAND Corporation. No other disclosures were reported.

Figures

Figure 1.. Flow Diagram of Physician, Patient, and Site Progress Through the Trial

LBS indicates larger bonus size; PCP, primary care physician; and PHO, physician-hospital organization. aPatients were not uniquely attributed to 1 physician at this stage. The total number of unique patients was 16 815.

Figure 2.. Adjusted Analysis of Evidence-Based Quality Measure Achievement in the Randomized Clinical Trial

Comparison groups include larger bonus size (LBS) plus increasing social pressure (ISP), LBS plus loss aversion (LA), and LBS only for 2015 through 2016. Data are expressed as adjusted odds ratios with 95% CIs (error bars) for pairwise comparisons. The adjusted model includes the covariates consisting of patient demographics (age, sex, race, and the number of chronic disease registries in which a patient is included) and physician demographics (age, sex, tenure, and specialty). Pairwise difference-in-differences comparisons indicate no significant difference.

Figure 3.. Analysis of Evidence-Based Quality Measure Achievement in Cohort Study

The cohort study evaluated larger bonus size (LBS) vs non-LBS groups from 2015 through 2016. A, Observed (unadjusted) changes in the primary outcome for the LBS group compared with the non-LBS group. B, Estimated risk-adjusted changes in the primary outcome for the LBS group compared with the non-LBS group. Error bars indicate 95% CIs.