Summary

Health plans have several financial incentives that they can use to encourage physicians to practice high quality medicine, to provide cost-effective primary and preventive care, and to contain health care costs. The use of FFS, discounted FFS, capitation, or salary to pay physicians may influence their treatment patterns and style. FFS payments provide few incentives to manage tests and procedures, while capitation payments provide incentives to treat patients more conservatively and appropriately. Payment adjustments, on the other hand, provide incentives for physicians to modify their treatment patterns and referrals to specialists and hospitals.

Together, these financial incentives introduce financial risk to the physician that they did not face prior to managed care. Physicians who face financial risk may alter the type of health care you have been used to receiving. Physicians strive to provide you health care that is cost-effective and well managed, and work with the health plan to balance health care costs and patient needs for good quality and access. You also have an important voice in these relationships and should feel free to talk with your physician and health plan about ways in which they can improve their quality and access.