Physician Gain-Sharing: What a Tangled Web We Weave

In an effort to control costs, it seems the Department of Health and Human Services is exploring physician gain-sharing programs:

The Health and Human Services Office of Inspector General has approved a handful of gainsharing arrangements in which physicians receive cash payments for reducing hospital spending. Gainsharing might reduce costs by aligning hospital and physician incentives, but concerns remain about quality and access.

But there are significant concerns with this approach:

Although the approved programs incorporated safeguards, questions remain regarding whether such narrowly structured programs can effectively reduce costs without harming access and quality. Specific concerns focus on whether physicians respond to gainsharing by limiting their use of quality-improving but costly devices ("stinting") or by treating only healthier patients ("cherry-picking") and avoiding sicker patients ("steering") at their gainsharing hospitals. Because of concerns about cherry-picking and steering, the OIG prohibits payouts to physicians with changes in their patient mix, measured by the prevalence of high-cost, high-risk patients. The OIG also has expressed concern that physicians would increase their caseloads within gainsharing programs, essentially receiving payments for referrals. To limit this, the OIG has required that any savings generated by an increased volume of patients insured by Medicare or Medicaid could not be included in physicians’ payouts. Others have expressed concern that gainsharing might limit patients’ access to new, beneficial drugs and devices.

Note that the "savings" are passed on to the hospital and doctor, but not the patient (nor their insurer).

Are we potentially robbing the poor to pay the rich with this approach?

-Wes