Gastroenterologists, along with other physicians, are addressing the dramatic changes that have occurred and will occur in their practices. Government regulations, managed care, third-party impositions, pressures from business, practice acquisitions, hospital relations, and various physician reorganizations are a few of these changes.

More and more, these changes are being driven by information such as physician and practice data from which profiles are created. These profiles are used to judge physicians and their practices. Hospitals have length of stay and cost profile data on physicians. Insurance companies and managed care organizations (MCOs) have cost profiles on physicians. The government has Medicare cost data but has not yet widely developed or used physician-specific cost profiles. Increasingly, physicians are hearing about economic profiling of individual physicians' practice patterns. In some communities, these profiles are being used for credentialing, deselection from insurance plans, and awarding of bonuses for certain behaviors. In most communities, the use of economic credentialing based on economic profiles has not yet occurred.

Because the accuracy of the data used in developing these profiles is debatable, physicians need to develop their own practice data in a format that enables them to present their own profiles and to negotiate based on their own data. The resource-based relative value system (RBRVS) presents a method to do that. RBRVS is no longer just a tool to determine reimbursement for physician services to Medicare patients. It can be used by physicians as a reasonably fair and easy method to profile themselves.

Gastroenterologists are facing another significant change in their practices. Increasingly, gastroenterologists are being presented with the option of whether or not to participate in a capitated reimbursement system. Third parties are attracted to capitation because it enables them to predetermine expenditures and shifts the full risk of providing care to health care providers. Physicians are beginning to understand the differences in capitation versus traditional insurance and the impact on their practices. Capitation rewards delivery of preventive care and the provision of the right care in the right setting by the right physician. Capitation discourages and actually financially penalizes overutilization and, in the long-term, underutilization.

How does a practice distribute revenues generated from capitated contracts? The usual productivity distribution system is not appropriate for capitation. Under productivity, physicians who provide more services receive more of the income. Under a capitated system with fixed revenues, physicians should not be rewarded for providing redundant services, but rather they should be rewarded for providing appropriate services.

Currently, capitated income is distributed by a variety of methods. Because for the majority of practices capitated revenues are still a relatively small percentage of total practice revenues, some practices divide the income equally among partners. Other practices continue to distribute the income based on physician productivity, which, as just discussed, is inappropriate. If capitation increases as a method of reimbursement and if a greater percentage of practice revenues is capitation based, physicians and practices must develop new methods of income distribution that reward providing efficient and appropriate care and discourage overutilization and underutilization.

This article addresses how gastroenterologists can develop their own physician and practice profiles and use such a system as a basis for capitated revenue distribution. The methods have been used by the author's group for 3½ years and have proven effective in both profiling and distributing capitated revenue.