News

Cost Profiling of Physicians Often Inaccurate


 

Current methods for profiling physicians as to whether they provide low- or high-cost care are often inaccurate and produce misleading results, according to a report in the New England Journal of Medicine.

Health plans use cost profiling to limit how many physicians get in-network contracts and to allot bonuses to the physicians whose “resource use” is lower than average. In each case, there must be a method for determining physicians' costs, yet the accuracy of these methods has never been proved, according to John L. Adams, Ph.D., of Rand Corp., Santa Monica, Calif., and his associates.

“To our knowledge, the reliability of physician cost profiling has not been previously addressed,” they noted.

Dr. Adams and his colleagues assessed the reliability of current methods of cost profiling using claims data from four Massachusetts insurance companies concerning 1.1 million adult patients treated during 2004-2005. The 12,789 physicians included in the study were predominantly men who were board certified, had been trained in the United States, and had been in practice for more than 10 years.

The physicians worked in 28 specialties, including endocrinology, cardiology, gastroenterology, and obstetrics and gynecology. Family physicians, general physicians, and internal medicine physicians comprised approximately one-third of the sample.

The investigators estimated the reliability of cost profiles on a scale of 0-1, with 0 representing completely unreliable profiles and 1 representing completely reliable profiles. They then estimated the proportion of physicians in each specialty whose cost performance would be calculated inaccurately.

Overall, 41% of physicians across all specialties had cost profile scores of 0.70 or greater, a commonly used threshold of acceptable accuracy. Only 22% of endocrinologists, 47% of internists, 30% of cardiologists, 41% of family or general physicians, 57% of ob.gyns., and 59% of gastroenterologists received scores of 0.70.

Overall, only 9% of physicians in the study had scores of 0.90 or greater, indicating optimal accuracy.

The proportion of physicians who were classified as “lower cost” but who were not lower cost ranged from 29% to 67%, depending on the specialty. Fully 50% of endocrinologists, 50% of internists, 40% of cardiologists, 39% of family or general physicians, 36% of ob.gyns., and 32% of gastroenterologists were misclassified as “lower-cost” providers when they were not.

In addition, 19% of endocrinologists, 22% of internists, 14% of cardiologists, 16% of family or general physicians, 10% of ob.gyns., and 11% of gastroenterologists were misclassified as “higher cost” when they were not in fact higher cost.

These findings indicate that standard methods of cost profiling are highly unreliable, and that many individuals and groups are basing important decisions on inaccuracies. “Consumers, physicians, and purchasers are all at risk of being misled by the results produced by these tools,” the investigators concluded (N. Engl. J. Med. 2010;362:1014–21).

The findings also suggests that cost profiles based on these methods will not reduce health care spending. “There are serious threats to insurance plans' abilities to achieve cost-control objectives and to patients' expectations of receiving lower-cost care when they change physicians for that purpose,” they added.

This study received support from the Department of Labor, the National Institutes of Health, and the Robert Wood Johnson Foundation. The investigators' conflicts of interest included support from the Physicians Advocacy Institute, Commonwealth Fund, and Ingenix Inc.

My Take

Abandon Seriously Flawed Programs

The RAND Corporation study verifies the American Medical Association's longstanding contention that there are serious flaws in health insurer programs that attempt to rate physicians based on cost of care.

The RAND study shows that physician ratings conducted by insurers can be wrong up to two-thirds of the time for some groups of physicians. Inaccurate information can erode patient confidence and trust in caring physicians, and disrupt patients' longstanding relationships with physicians who have cared for them for years.

Patients should always be able to trust that the information they receive on physicians is valid and reliable, especially when the data are used by insurers to influence or restrict patients' choice of physicians.

Given the potential for irreparable damage to the patient-physician relationship, the AMA calls on the health insurance industry to abandon flawed physician evaluation and ranking programs, and join with the AMA to create constructive programs that produce meaningful data for increasing the quality and efficiency of health care.

J. JAMES ROHACK, M.D., is president of the American Medical Association. He reported no conflicts of interest.

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