NYC hospitals may base doctors' pay on performance

Proposal would make city hospitals the first to extend bonuses to staff physicians

January 14, 2013

New York City's Health and Hospital Corporation (HHC) has proposed a plan that would align doctors' raises with their performance on quality measures.

According to the New York Times, HHC—the country's largest public health system—hopes the plan will result in increased hospital performances to qualify for federal bonuses established by the Affordable Care Act. The proposal is the first to extend the financial incentives to the doctors responsible for treatment. 

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Under the proposal, about 3,300 doctors would receive group bonuses amounting for up to 2.5% of their salaries—which range from about $140,000 for entry-level primary care physicians to $400,000 for experienced specialists—based on performance measures.

The hospital system has created 13 performance indicators for the plan, including: 

  • Whether doctors get to the operating room on time;
  • How quickly patients are discharged;
  • Patient feedback on doctor communication;
  • How many patients with heart failure and pneumonia are readmitted within 30 days; and
  • Speed of admitting ED patients.

HHC estimates that bonus payments could amount to as much as $59 million over the next three years.

Physicians express concerns with proposals

The proposal currently is being negotiated with the doctors' union and is expected to be incorporated in any deal that is reached, according to the Times.

However, some physicians are hesitant to link bonus payments to quality of care because they say they could be penalized for conditions they have no control over, such as hospital cleanliness, nurse attentiveness, and the availability of hospital beds. 

A model for the nation?

According to the Times, the idea of linking physician bonuses with their performance could catch on with hospitals elsewhere.

Anish Mahajan—director of system planning for the Los Angeles County Department of Health Services, which is the nation's second-largest public health system—says the idea is "intriguing" and is "something we would hold out as a potential thing" to do in the future (Hartocollis, New York Times, 1/11).

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