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Financial Incentives and Physicians' Perceptions of Conflict of Interest and Ability to Arrange Medically Necessary Services

January 2003
Journal of Ambulatory Care Management, Vol.26, No.1 (January 2003), 39-50
Jeffrey Stoddard, Marie C. Reed, Jack Hadley

Many believe that physician payment mechanisms that include incentives to restrain utilization create conflicts of interest for physicians and result in the witholding of needed services. Pooled data from two rounds of the Community Tracking Study physician survey, a ntionally representative telephone survey of physicians, are the basis of this analysis. We examine the association between explicit financial incentives linked to physician profiling and perceived conflict of interest, and the reported ability to obtain specific, medically necessary secondary services (referrals, hospitalizations and diagnostic imaging). Logistic regression models were employed to control for potentially confounding influences. After controlling for other factors, physicians subject to profiling linked with financial incentives were much less likely than physicians not affected by profiling to strongly agree that they can make clinical decisions in the best interests of their patients without the possibility of reducing their income. They were also less likely to report tht they could always obtain selected medically necesary secondary services for their patients. Physicians subject to explicit financial incentives based on profiling are more likely than other physicians to perceive a conflict of interest. Physicians with financial incentives tied to profiling also experience greater difficulty obtaining medically necessary secondary services for their patients.

A full copy of this article is available at the Journal of Ambulatory Care Management Web site. (Subscription required.)


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The Center for Studying Health System Change Ceased operation on Dec. 31, 2013.