Physician cost-profiling may be misleading

Current methods of profiling physicians based on the cost of care may be unreliable, according to a study conducted by the RAND Corporation and recently published in the New England Journal of Medicine.

J. James Rohack, MD, president of the American Medical Association (AMA), responded to the study in a press release.

“The RAND Corporation study published today verifies the AMA’s longstanding contention that there are serious flaws in health insurer programs that attempt to rate physicians based on cost-of-care,” Rohack stated in the release.

According to the study, it is becoming more common for insurance companies to offer patients incentives for choosing physicians who are classified as offering lower-cost care on the basis of cost-profiling tools. In their study, John L. Adams, MD, of the RAND Corporation, and colleagues aimed to evaluate the accuracy and reliability of these tools in distinguishing higher-cost physicians from lower-cost physicians.

The researchers aggregated and analyzed two years of claims data across four health plans that enrolled approximately 80% of commercially insured people in Massachusetts. The researchers noted that “59% of physicians had cost-profile scores with reliabilities of <0.70, a commonly used marker of suboptimal reliability.”

Reliability and misclassification

Based on the reliability results, an estimated 22% of physicians would be misclassified in a two-tiered system, with an overall rate of misclassification ranging from 16% to 36%.

According to the study, 43% of the physicians who were considered lower-cost practitioners were misclassified suggesting “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.”

Rohack called for new programs to provide information for improved quality of care. “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,” he stated in the release.

The authors of the study concluded, “These findings bring into question both the utility of cost-profiling tools for high-stakes uses, such as tiered health plan products, and the likelihood that their use will reduce health care spending. Consumers, physicians, and purchasers are all at risk of being misled by the results produced by these tools.”

Adams JL. N Eng J Med. 2010;362:1014-1021.