Financial incentives to perform medical procedures and laboratory tests: illustrative models of office practice

Abstract

Financial return is one of several factors that may affect a physician's decision to order services for a patient. The extent of financial incentives to perform in-office medical procedures and laboratory tests is illustrated by four hypothetical models of general internal medicine office practice. The model practices consist of fixed ratios of history and physical examinations to return visits, with numbers and types of medical procedures and laboratory tests increasing stepwise through the four models. The procedures and tests included are an electrocardiogram, urinalysis, complete blood count, sigmoidoscopy, tuberculin skin test, two-view chest x-ray, cardiovascular treadmill stress test, and an automated 12-channel blood chemistry test. Charges and office expenses are estimated at 1977 Northern California levels. Net incomes derived for the four models are as follows: $31,000, $55,000; $60,000; and $90,000. The demonstrated financial incentives, which apply not only to internal medicine, but to all fields of medical care, are in conflict with policies that would emphasize personal rather than technical services. National health insurance proposals should include a continuing review of medical services valuation.