pensation and to serve on clinical oversight committees, taking time away from their primary patient care role. An organization must make a substantial investment in medical and other clinical leadership, as well as build an effective management and information infrastructure to use for tracking outcomes, assessing performance, and setting clinical improvement goals. This investment should include tools and training in quality methods, but also adequate information systems that can be applied to clinical quality improvement (see Chapter 7).


As noted earlier, the IOM held a workshop on April 24, 2000, to discuss the relationship between payment and quality improvement. At the workshop, several examples were provided to illustrate how various existing payment methods—including fee for service, capitation, a blended method, and a shared-risk (budget) method—could be adapted to support quality improvement. This section describes the examples presented at the workshop.

Adapting Fee-for-Service Payment

Dr. Glenn Littenberg described how fee-for-service payment could be adapted to provide incentives for quality improvement by encouraging cooperation and providing reimbursement for care outside of the traditional office visit, which is not always optimal for meeting patients’ needs. The approach involves developing relative values for the elements of work performed over time by physicians and other health professionals. For example, physicians provide care between visits, including coordination of complex cases, phone consults with patients and other professionals, and follow-up on tests performed. These activities do not require face-to-face contact, but can occupy a significant amount of professional time. A Current Procedural Technology (CPT) code could be developed for use of electronic media with the patient not present for specific communications, for research, for clinical updates, and for coordination of care with other health professionals within a 30-day period. Codes could also be developed and relative values assigned for other organizational innovations designed to improve quality (e.g., anticoagulation clinics, which would include the clinical groups that have key roles, such as physicians, pharmacists, nurses, and dietary staff).

Despite the growth of alternative payment methods, fee-for-service payment remains important. Even in capitated systems, many individual physicians are paid using a fee-for-service method. Additionally, fee-for-service payment levels often serve as the benchmark for other payment methods. As a result, financial support for activities that would improve quality care and rely on fee-for-service payment remains one avenue for building in rewards for quality care.

The National Academies of Sciences, Engineering, and Medicine
500 Fifth St. N.W. | Washington, D.C. 20001

Copyright © National Academy of Sciences. All rights reserved.
Terms of Use and Privacy Statement