Tiffany Di Pietro explains how Medicare Advantage at-risk contracts pay doctors a fixed amount per patient, which can push them to limit diagnostics and expensive medications. The model does incentivize proactive care for chronic diseases like diabetes, but the financial pressure cuts both ways.
Saving the worst for last is what we call at-risk contracts, which a lot of patients have no idea that their doctors are a part of because they're just in an Advantage plan. And it's great for the patient. This Advantage plan pays for their medications, pays for their doctor's visits, hospital visits, even dental, transportation, all kinds of stuff that general Medicare doesn't cover. However, what these patients don't realize when they have an at-risk doctor is a lot of times the doctor is incentivized to not spend money because by spending money, the doctor gets paid less. So the doctor a lot of times will get paid a monthly dollar value per Medicare life. So let's say it's $100 a month, and that's to keep you healthy, and that's wonderful. But the doctor's bonus is part of this piggy bank, to simplify it. And let's say that piggy bank is $10,000 a year. And so for anything additional that I have to spend on this patient, it comes out of this piggy bank. But guess what? My bonus also comes out of that piggy bank. So the doctor is incentivized to not spend that money. Because that's where their bonus comes from. Or even worse, if they spend too much money, then they're responsible for that care. And no one, like the doctor, isn't going to want to be responsible for your healthcare costs. So an at-risk contract, in my opinion, is one of the worst things that we have in medicine because it inappropriately incentivizes physicians to not spend money on diagnostic tests and to not spend money on expensive medications for their patient. It's a plus because it does incentivize them to be very proactive about certain things like diabetes and blood pressure and so on and so forth, but it is just a bad way of practicing medicine in my opinion. Not a fan of AT-RISK.
