Physician Incentives and Compensation

In general, we found that the financial incentives applied to physician practices via alternative payment models were not simply “passed through” to individual physicians. Even practices of relatively modest size reported shielding their physicians from direct exposure to the financial incentives created by payers—except in the case of traditional FFS payment. In fact, the greatest financial incentive facing nearly all physicians in the study, even those in practices with substantial exposure to payment models intended to contain the costs of care (capitation, shared savings, and episode-based payment), was to increase productivity as measured by revenues or RVUs. Notably, only