Performance pay a topic at St. Luke's trial

Doctors say the system is weaning them off salaries based on how much work they do.

adutton@idahostatesman.comOctober 10, 2013 

  • YOU ASKED

    Here are a couple of highlights of a live chat Wednesday at IdahoStatesman.com with Statesman reporter Audrey Dutton and freelance journalist Carissa Wolf, who is covering the trial for MLex legal news service:

    Q: Is there much of a chance a ruling against Luke's would involve Boise, Twin Falls and other medical/business practices besides just Nampa?

    Wolf: This case could set precedent that could affect future mergers. This suit stands as the first significant case that tests the argument that new laws crafted under the Affordable Care Act to encourage collaboration and improve services forced St. Luke's into the merger. If Winmill rules that the defense proved the acquisition was necessary, it could open the door for hospitals to proceed with similar purchases.

    Q: What are the possible outcomes of this trial? Will it have to be a complete victory by one side or the other or can the judge issue a split decision, if you will?

    Dutton: I've wondered the same thing, so I'm afraid I don't have a good answer. What I've been told is that the plaintiffs are requesting a complete unwinding of the deal - so, all or nothing. I honestly don't know if the judge could issue a split decision. That's a question I'll be sure to answer in a future story.

St. Luke's is highlighting its plan to change how doctors earn their money as it defends its buyout of Nampa's Saltzer Medical Group in a federal court trial this month.

St. Luke's is arguing to U.S. District Judge B. Lynn Winmill that it can slow the skyrocketing costs of health care, but its plan depends first on having a core group of employed doctors - including in Nampa - who are willing to bet their incomes on whether they can make patients healthier.

Attorneys for St. Luke's opponents hope to poke holes in that theory. Saint Alphonsus Health System, Treasure Valley Hospital, the Federal Trade Commission and the Idaho attorney general are suing the health system over its acquisition of Nampa-based Saltzer Medical Group, alleging that the buyout gave St. Luke's an overwhelming share of the primary-care market. That could allow St. Luke's to raise prices and steer patients away from competing hospitals, the plaintiffs say.

Marshall Priest, a heart doctor with 35 years of experience in Idaho, became a St. Luke's employee in 2007. His cardiology practice was among the first to join St. Luke's, though one-third of the doctors in the practice joined Saint Alphonsus.

Priest testified Tuesday that a large share of his pay from St. Luke's is incentive-based, with 70 percent tied directly to "quality." The rest is based on the volume of work, he said. That split was 50/50 last year. In three years all of his incentive-based pay will be tied to "quality" measurements, he said.

"There would be no way, as a private practice group," for the physicians to focus as much on quality, because independent physicians must focus on bringing in enough money to support their businesses, he said.

On Wednesday, a lawyer for Saint Al's asked Priest to clarify those numbers.

About 23 percent of Priest's paycheck comes from an incentive bucket, and within that bucket, 70 percent is contingent on hitting quality goals, he said. In the end, Priest said only 15 percent of his pay is tied to quality.

Mark Johnson, a family doctor at St. Luke's Clinic-Mountain View Medical Center in Boise, testified that he doesn't yet earn any money based on quality measurements, such as how many diabetes patients are controlling their disease.

"Our group is a little more complex," Johnson said. He said each of the eight doctors in his office has a different contract with "close to eight variations on compensation."

But the expectation that they could focus on quality care, without worrying about running a business, is a key reason the group joined St. Luke's, he said.

A "scorecard" that St. Luke's software generates to measure a physician's performance "will undoubtedly be an important tool" in the future for determining how they are paid, he said.

In transcripts from an April deposition that were released Tuesday, Chris Roth, the CEO of St. Luke's Regional Medical Center in Boise, said that more than 80 percent, but probably less than 95 percent, of physician pay at St. Luke's clinics is still based on productivity.

He said the hospital's goal over a five-year period is to tie "up to 50 percent" of orthopedic and neurology physicians' pay to quality targets.

The contract with Saltzer doctors is to pay them based only on how many patients they see and how much work they do, Roth said.

"And then - but we've talked with Saltzer about the need to begin this - the shift," he said.

Audrey Dutton: 377-6448

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