Benchmarking medical group practices using claims data: methodological and practical problems

As claims data for physicians and groups of physicians has improved in quality and quantity, health information vendors have begun marketing information about medical groups' productivity, utilization, and quality. Based on interviews with product developers and our understanding of the evolution of their products, several methodological and practical issues remain. For now and the immediate future, health information vendors will continue to face the limitations of physicians' claims data. Vendors and purchasers should be aware of common data shortcomings such as inadequate monthly enrollment figures, possible physician upcoding to circumvent utilization management restrictions, and incorrect coding when a test is used to rule out a disease. In the longer term, several avenues seem likely to make medical groups' data better and richer because of computer-based medical records and efficiencies possible from the Internet. The field of benchmarking products for group practices is still an immature market. However, several trends suggest such products are highly desirable. Provider organizations which bear medical risk need benchmarking data to help improve their efficiency. There are many important nonprovider organizations that need good information on group practices' utilization patterns and outcomes to help them plan new products and negotiate with physicians.