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Kaiser Permanente Rewards Its Physicians with Steep Bonuses

December 18, 2012 -- It’s not unusual for health insurers to reward physicians with bonuses after they tally their financial records at year’s end.
December 19, 2012

December 18, 2012 -- It’s not unusual for health insurers to reward physicians with bonuses after they tally their financial records at year’s end.

Up until now, Kaiser Permanente based those bonuses on specific quality targets such as the percentage of women screened for breast cancer or the initiation of drug and alcohol treatment. That was the case in 2010, according to a memorandum obtained by The Lund Report sent by Dr. Sharron Higgins, then president and executive medical director. She told its full-time senior physicians they could expect to receive a gross payment of $2,500 in February 2011, while another at-risk payment could be paid out in March 2011 “after the financial books for 2010 close.”

But things have changed since Dr. Jeffrey Weisz became president and executive medical director of the Northwest Permanente Medical Group last January.

According to a candid interview with The Lund Report Weisz said he planned to reduce outside medical costs by, among other things, not paying for outside medical care at Oregon Health & Science University. “We’re spending millions of dollars in care at OHSU,” he told The Lund Report. “Up until now, it’s been a fairly easy path to go over there. I believe we have the same quality care.”

Last month, Weisz announced the bleeding had stopped after he’d succeeded in bringing other services inside Kaiser such as imaging procedures when he spoke at a gala celebration attended by hundreds of physicians at the Oregon Convention Center.

As a reward, the nearly 1,200 physicians at Kaiser can expect to receive bonus checks ranging from $6,000 to $21,000 in January. Dentists and optometrists can also expect bonuses, according to reports from people who attended that gala. Added together, that means Kaiser is writing checks to physicians totalling millions of dollars.

Asked for a statement about the bonus payments, here’s the response from Weisz:

“Kaiser Permanente has always been the quality leader in this region and our doctors play a major role in that. We put the patient at the center of everything we do. I am proud of the quality of Northwest Permanente’s care, which I believe is among the best in the country.

“Our physician-led care teams achieved a lot in 2012. We’ve worked hard. And there’s growing evidence our hard work is paying off. I’m proud this performance was recognized in 2012 by trusted organizations like J.D. Power and Associates, The Leapfrog Group, NCQA, CMS, eValu8, the State of Oregon, the Pharmacy Quality Alliance, and the Society of Thoracic Surgeons. I’m pleased we could recognize our physicians for reaching our patient satisfaction, access, and care quality goals, while working to keep our services affordable.

“Frankly, I encourage all of our physicians and care teams to continue working hard, so that our reputation for providing high-quality care and service affordably continues to grow, and more people in our area to choose Kaiser Permanente to have access to this outstanding care.”

David Northfield, media spokesperson for Kaiser, also issued these remarks:

“With the region’s largest physician group, Kaiser Permanente Northwest has nearly 1200 physicians, representing 30 specialties.

“Kaiser Permanente’s physicians’ compensation and incentives – like those of our executives and frontline staff – are assessed annually. These incentives are designed to align all of our care delivery teams and administrative teams’ efforts to providing our members high-quality care and service as affordably as possible.

“Supported by the advantages of our integrated care delivery system, our physician-led care teams deliver high-quality, connected care to keep people healthy, and to help those who are sick or living with a chronic condition get the right care. Our evidence-based approach to prevention, detection, treatment, and the patient care experience allows our care teams to support our members in managing their total health.”


Submitted by Dave Northfield on Sat, 12/22/2012 - 11:33 Permalink

It is disappointing that the Lund Report misleadingly characterized the compensation program used within Kaiser Permanente. Here in the Northwest, the physician compensation program has not changed. Our physicians are salaried, with annual group-level incentives for meeting care-quality and patient service goals, which put our members at the center of everything we do. To suggest, as this article does, that Kaiser Permanente's physicians have a financial incentive to deny needed care and coverage is wrong, and does a disservice to the outstanding care our physicians deliver to our members every day. In 2012 Kaiser Permanente Northwest broadened the range of care services we provide through our own physicians in our own facilities. Our ability to provide coordinated care is an advantage that helps us focus on enhancing the quality of our care and service like few care organizations can. But where we may need to refer our members for specialty care services we do not provide, we work with contracted hospitals, physicians, and regional centers of excellence. The goal of our integration is to enable us to provide high-quality care services more affordably, and this is a responsibility shared by everyone at Kaiser Permanente. Our excellent quality and service scores, and awards such as the J.D. Power & Associates, reflect what our members think about our performance, and we remain committed to maintaining their confidence in us. --David Northfield Kaiser Permanente