Sindhu Kubendran
Senior Research Analyst, Health Economics Research
Sindhu Kubendran is a senior associate and research analyst at the Milken Institute who focuses on areas of public health that include prevention, wellness, chronic disease, and longevity. At the Institute, Kubendran is a co-author of the reports, “Healthy Savings: Medical Technology and the Economic Burden of Disease,” which examines...
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Physician Payment Incentives That Don’t Make Sense

By: Sindhu Kubendran
January 13, 2016

Health and medical experts have created a diverse array of interventions to combat the tangled web of risk factors and aggravators for obesity. One barrier to implementing effective programs is the difficulty health professionals encounter in being paid for time spent with patients who need treatment for obesity.

In the medical setting, revenue most often comes from insurance reimbursement, and what insurance companies cover usually dictates the care a physician provides. Medicare often sets standards that guide the coverage and reimbursement decisions of private insurance companies. With an issue as high in profile as obesity, in the current prevention-oriented environment (prevention is an emphasis of the Affordable Care Act, though as a priority obesity prevention pre-dates the ACA), Medicare would not be setting a good example if it did not cover a treatment for obesity.

Since November 2011, Medicare has covered obesity counseling (“intensive behavioral therapy”) by a primary care provider to patients who are obese, defined as having a body-mass index of 30 or greater. Obesity counseling allows clinicians to educate patients about to lose weight, tailoring interventions to suit their lifestyles. This is an exciting commitment to the spirit of prevention. (The model has flaws, though, because there’s no coverage for counseling people who are overweight but not yet obese to prevent further weight gain, and BMI is not necessarily the best indicator of disease risk.)

Despite the growing need for this service, we are seeing very little utilization of obesity counseling in doctor’s offices. Delving deeper into this subject reveals why. Medicare reimburses obesity counseling at one-fourth the rate of a regular patient appointment.

Though health-care priorities are shifting toward value from volume, medical practices make money based on the number of patients seen. If obesity counseling pays only a quarter of what a normal patient visit would, then the natural incentive for clinicians is to see the next patient instead of providing counseling, something that unfortunately clinicians receive relatively little training to do. Dietitians, on the other hand, go to school specifically to learn how to provide nutritional counseling. Yet Medicare covers nutritional therapy from a dietitian only if a patient already has diabetes or end-stage kidney disease.

The details of insurance coverage and reimbursement are tedious and easy to ignore, but they make a major impact on the practice of medicine and patient outcomes. As with Medicare’s coverage of obesity counseling, a policy pays only lip service to an issue if it is hindered by structural conditions that prevent better outcomes. People still need help in preventing and reducing obesity, and current support in medical settings is clearly insufficient. This is something many stakeholders have long known. At the recent Milken Institute California Summit, government officials and industry representatives alike called for better preventive care.

Unfortunately, the best course of action in terms of providing better preventive care is still being determined. The move toward new payment schemes and incentivizing quality care—a shift toward value—has already begun and been solidified through the Affordable Care Act and the Medicare Access and CHIP Reauthorization Act. These laws do not directly reimburse for obesity counseling; they provide financial incentives for better health outcomes. As policies they represent a big step forward. Providers, payers and advocates are still reacting, experimenting with operational changes while the health-care market rapidly consolidates. The best way to approach obesity in the medical setting could crystallize once the dust settles. If that’s to happen, providers, payers, policymakers, and patients must make sure that payments align to achieve the necessary outcomes.


  • Hopefully I'm missing something, but as a business person who has done a little work on incentive programs, there is nothing about this summary which leads me to believe "unscrupulous" doctors won't try to accept only new, healthier patients.

    Posted by Neil, 01/19/2016 (2 years ago)

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