Physician Groups Need Incentives, Leadership

Posted by on Mar 25, 2015 in ZOLO News | No Comments

Meaningful incentive pay for primary care physicians and strong organizational leadership are key requirements for physician organizations to successfully transform from volume to value-based health care programs, according to a survey by ZOLO Healthcare Solutions (

The survey of 10 physician organizations, comprising more than 12,000 physicians in three states found that each organization was moving aggressively toward value-based care, which rewards physicians for quality, cost efficiency, and outcomes rather than the number of patients and procedures. While physician groups custom tailor their approaches to value-based care, most efforts have several important features in common.

“Communication, transparency, and trust in leadership were necessary to gain physician support for value-based health care initiatives among the groups we surveyed,” said Deb Lowry, managing partner of ZOLO Healthcare Solutions.

The survey discovered several other commonalities among physician organizations implementing value-based care:

  • Financial incentives are at least 10 percent of total compensation — and preferably 20 -25 percent — to change behavior among primary care providers.
  • Leaders take the initiative to convey to patients, payers, and regulators that value-based programs are essential to improving quality and reigning in costs.
  • Organizations understand that transitioning to value-based care can take years and requires continual adjustment.
  • To avoid conflicts that might be associated with financial incentives to individual physicians for reducing utilization, many organizations stress rewards for the group practice as a whole for appropriate utilization.

“The transition from fee-for-service to performance-based compensation has gained tremendous momentum in recent years, but the change is incredibly difficult,” said Don Nielsen, MD, a consultant with ZOLO Healthcare Solutions. “Health plans, providers, and payers need more than technical systems to make it work. They need a common commitment to shared goals in achieving value- based care that results in the improved efficiency and effectiveness of care. ”

The survey also found that physicians uniformly recognize the importance of supporting value-based health care through creation of robust case management systems for chronic disease, catastrophic cases, discharge planning, and patient education.

Survey results were based on an analysis of publicly available data for three plans and on confidential interviews with seven medical groups. The survey was conducted in 2013.