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CONFERENCE SUMMARY
Sunny G. Yoder
The Institute of Medicine sponsored a conference on Strategies for
Reform of Physician Payment that was held on October 27 and 28, 1983, at
the National Academy of Sciences, Washington, D.C. The conference was
organized by the Institute's Division of Health Care Services to provide
an opportunity for members of the Institute and others from medicine,
industry, government, and academia to discuss the issues involved in
physician payment, to identify problems with existing payment methods,
and to suggest how the Institute might contribute to future deliberations
on the topic by public and private decision makers. A list of
participants appears as Appendix A. Although a primary purpose of the
conference was advice on a possible further Institute activity, the
discussion summary and the background papers should be of interest to all
concerned with physician payment issues.
The conference represented the most recent manifestation of a long-
standing Institute concern about the influence of physician payments on
health care in this country. In a 1974 study, Medicare-Medicaid
Reimbursement Policies,. an Institute committee examined alternative
methods of payment for physician services in teaching hospitals and
considered the effects of those payments on the specialty and geographic
distribution of physicians. The committee recommended that payment
mechanisms be changed to provide higher payments for ambulatory services
in order to better support primary care residency training and thereby
increase the number of primary care physicians. Other Institute studies
have identified undesirable and usually unintended inf luences of payment
policies on patterns of health care. A 1978 study, for example, found
that payments for primary care services were having an adverse effect on
the avai labi lity of primary care. The study committee recommended that
third-party payers change their payment structures and practices to
(1) pay all physicians the same amount for primary care
services, with payment levels based on the minimum
level of skill required;
(2) reduce the differentials in payment levels between
primary care and other procedu res; and
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(3) institute payments for certain primary care services such as
health education and preventive services.*
More recently the Institute's Board on Health Promotion and Disease
Prevention has pointed to inadequate payment levels (and inadequate
insurance coverage) as negative influences on patients' decisions to
seek, and physicians' decisions to provide, preventive services. The
Board on Mental Health and Behavioral Medicine has raised the issue of
low payment levels for cognitive and psychosocial services.
In a 1982 survey, Institute members were asked to suggest critical
issues that the organization should address. They ranked physician
payments as having the highest priority. An ad hoc group was convened
in March of 1983 to consider how the Institute of Medicine could engage
with this issue. The group found it likely that the IOM could make a
useful contribution, but that the complexity and sensitivity of the
issues called for a sequence of act ivities:
commissioning of papers by experts on several aspects
of phys ic fan payment
a staff analysis of existing forms of physician
payment and physician earnings
3. a meeting whose participants were familiar with the
commiss toned papers and stat f analysis.
The meeting was envisioned as a small, invitational conference of 25 or
30 people. But because of the intense membership interest in the issue,
the conference was expanded by extending invitations to all members and
scheduling it in conjunction with the 1983 annual meeting of the
Institute. Five background papers were commissioned and distributed in
advance:
The Impact of Changes in Payment Methods on the
Supply of Physicians' Services,. a critical review of
relevant economics literature by Robert Lee, an economist
at the University of North Carolina;
Politics as Usual and Customary? Physician Payment
in Transition,. an assessment of political considerations
*Institute of Medicine, HA Manpower Policy for Primary Health Care,.
Washington, D.C.: National Academy of Sciences, 1978, pages 45-52. A
conference was held by the IOM in 1978 to explore the payment issues
raised in the primary care report with public and private third-party
papers, union and industry purchasers of health insurance, physicians,
and other providers of health care. See Institute of Medicine,
Reimbursement Policies for Primary Health Care,. Report of a Health
Policy Forum, May 24, 1978, St. Louis, Missouri. Washington, D.C.:
Nat tonal Academy of Sciences, October 1978.
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Representative terms from entire chapter:
physician payment
