EP403: The Mix & Match With the How Doctors Get Paid, With Rachel Reid, MD, MS

Health systems increasingly get paid through value-based or capitated contracts — but the individual physicians actually seeing patients inside those systems are still, more often than not, paid the old-fashioned way: fee-for-service RVUs with a thin layer of quality bonuses on top. In this episode, Stacey Richter talks with Rachel Reid, MD, MS, a physician policy researcher at RAND Corporation and primary care physician at Brigham and Women's Hospital, about a study she co-authored looking at exactly how U.S. health systems compensate and incentivize their physicians — and the five reasons that misalignment persists even when everyone agrees it's a problem.

WHAT YOU'LL LEARN

✅ Why most physicians — including PCPs — are still paid primarily on RVU-based productivity, even when the health system employing them is being paid through value-based or capitated contracts

✅ The five reasons Dr. Reid identifies for why physician compensation models rarely change to match how the organization itself gets paid: insufficient payment size, a fee-for-service "chassis" already baked into most value arrangements, the difficulty and risk of overhauling comp models, plain inertia, and lack of consensus on what to actually incent

✅ Why misaligned compensation is a real driver of physician moral injury — wanting to do right by a patient but not getting paid, or getting in trouble, for doing so

✅ How this plays out for self-insured employers specifically: a plan can pay a health system a value-based or capitated rate for a "medical home," while the PCPs actually seeing members are paid fee-for-service underneath that arrangement, with the difference pocketed upstream

✅ What Dr. Reid recommends plan sponsors actually do about it: write physician compensation expectations directly into the contract, rather than assuming a value-based payment to the organization trickles down to the doctor

WHY THIS MATTERS

"There's no current gold standard for how to pay doctors," Dr. Reid says — which means the industry is left guessing at both halves of the equation: what counts as high-value care, and how to actually pay for it. Until physician compensation is explicitly tied to the same goals a health system's own contract is being paid to achieve, plan sponsors buying "value-based care" or a "medical home" risk paying for an outcome the doctor on the other end has no financial reason to deliver.

MENTIONED IN THIS EPISODE

Study: "Physician Compensation Arrangements and Financial Performance Incentives in US Health Systems" (JAMA Health Forum)

EP295 with Rebecca Etz, PhD: Apple Podcasts | Spotify | Other Apps

=== LINKS ===

🔗 Show Notes with all mentioned links: Episode Page

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00:00 Introduction.

08:11 Why Dr. Reid decided to do the study in the first place.

09:49 What are the main foundations of what doctors are paid on?

10:31 Why is value-based compensation still just the "icing" on the cake?

13:08 What is the biggest value add for doctors, and does it vary between specialties?

14:32 Why wouldn't a physician organization change their comp models?

19:55 Are we at a moment of evolution?

20:20 "Tying dollars to measured quality gaps doesn't necessarily produce results."

22:04 "I don't think there's a current gold standard for how to pay doctors."

25:37 Job one: What are we trying to incent?

31:28 From the payer or insurer perspective, what's the leverage they have to change doctor compensation?