Use of care management practices in small- and medium-sized physician groups: do public reporting of physician quality and financial incentives matter?

The need to improve both the quality and the safety of health care in the United States is well documented. Reporting of quality data and pay for performance for physicians have emerged as two of the most widely advocated strategies for accelerating quality improvement (Rhoads, Konety, and Dudley 2009; Rodriguez et al. 2009; Gavagan et al. 2010; Hibbard, Stockard, and Tusler 2003). Quality performance reporting is argued to improve physician quality of care by appealing to physicians' professional ethos and increasing transparency of quality information to relevant peers or external stakeholders (Marshall et al. 2000; Lindenauer et al. 2007). Pay for performance programs are intended to reward quality performance and reverse financial incentives that can deter physician practices from investing in quality improvement efforts (Beaulieu and Horrigan 2005; Cutler et al. 2007; Lindenauer et al. 2007; Young et al. 2007b; Glickman et al. 2009). However, despite the intuitive appeal of quality reporting and pay for performance, and the increasing body of evidence in the hospital sector, little is known about the effects of such efforts in physician practices, as they affect efforts to improve quality of care (i.e., Marshall et al. 2000; Peterson et al. 2006; Rosenthal and Frank 2006; Greene and Nash 2009; Robinson et al. 2009a,b). Although there is broad agreement that providing performance data and feedback to physicians is likely to motivate improvements in care, there is debate around whether such improvements are motivated at the margin by physician performance data that are publicly reported, relative to data reported privately to the physician group and its members (Wagner et al. 2001; Tsai et al. 2005; Werner and Asch 2005; Casalino et al. 2007). A second point of contention are whether physician quality performance data alone are sufficient to motivate changes in care processes, or alternatively, if specific financial incentives must be linked to performance data to have an effect on quality improvement efforts (Shaller et al. 2003; Rosenthal et al. 2004; Fisher 2006; Casalino et al. 2007; Young et al. 2007a). Thus, two dimensions of quality reporting in physician practices warrant further examination: (1) whether quality information is publicly reported or, alternatively, reported only to the practice and the physicians working in that practice and (2) whether reimbursement and/or financial incentives are tied to the quality metrics reported. In principle, quality reporting may vary independently on these two dimensions such that, for example, a practice may receive reports publicly, but they may not be linked to reimbursement or incentive payments. Alternatively, quality reports may be promulgated only to physician practices, and these reports may or may not be linked to financial payment. This study examines the question of whether physician practices subject to quality reporting show marginal differences in the use of care management practices (CMPs) if quality reports are made public and if financial incentives are tied to quality performance. CMPs are defined as organized processes implemented by physician groups to systematically improve the quality of care for the patients they serve (Casalino et al. 2003; Shortell et al. 2009). CMPs such as use of patient registries, electronic medical records, physician performance feedback, provider education, and reminders have been associated with significant improvements in provider adherence to guidelines and with significant improvements in patient disease control (Weingarten et al. 2002; Welch et al. 2011). Similarly, organizational interventions that facilitate the structured and regular review of patients showed a positive effect on a variety of quality process measures (Renders et al. 2001; Gilbody et al. 2003). Because the majority of the existing studies examining these issues were conducted with large physician practice organizations (Casalino et al. 2003; Li et al. 2004; Mehrotra et al. 2007; de Brantes and D'Andrea 2009), it is difficult to generalize the findings from those studies to all physicians and physician practices. Our study extends this line of inquiry by examining the association of public reporting (PR) of physician quality and financial incentives for quality performance in small- and medium-sized physician practices.