THE EFFECTS OF PAY-FOR-PERFORMANCE ON PHYSICIANS' TREATMENT OF PATIENTS
As rising healthcare costs continue to garner national attention, pay-for-performance has been one strategy put forth to counteract the increasing costs and to improve the quality and effectiveness of healthcare. One of the concerns that has accompanied the rise of pay-for-performance in the healthcare context is that it might incentivize physicians to avoid sicker, more complicated patients. Controlling for other measurable variables that affect patient-health outcomes, this thesis examined whether or not pay-for-performance affected physicians' treatment of patients. There was no comprehensive data set addressing physician participation in pay-for-performance, but the best publicly available data set that I found was the 2007 National Ambulatory Medical Care Survey, which I used to examine the effect of physicians' participation in pay-for-performance on their referrals of patients to other physicians. Controlling for patient age, tobacco use, and chronic illness, the regressions I ran actually showed that physicians participating in pay-for-performance programs were less likely to refer their patients to other physicians than were physicians not participating in pay-for-performance programs. This unexpected result might have been due to the lack of granular data on pay-for-performance programs (i.e., that there was no differentiation in the data between physicians participating in pay-for-performance as measured by adherence to clinical guidelines and physicians participating in pay-for-performance as measured by patient outcomes). The data also lacked information on the reasons for physician referrals to other physicians. This thesis also found that chronically ill patients were less likely to have seen physicians who participated in pay-for-performance programs. Additional research, which will necessitate more comprehensive data-collection, is necessary before policymakers can credibly advocate or discredit pay-for-performance as a main, cost-saving component of healthcare reform.
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