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Physician cost profiling--reliability and risk of misclassification.
John L Adams1, Ateev Mehrotra, J William Thomas
1RAND, Santa Monica, CA, USA.
The New England Journal of Medicine
|March 19, 2010
Summary
Physician cost-profiling tools used in insurance may misclassify many doctors. A study found that 22% of physicians could be inaccurately labeled as lower-cost, potentially misleading patients.
Area of Science:
- Health Economics
- Health Services Research
- Medical Informatics
Background:
- Physician cost-profiling tools are increasingly used in insurance products to guide patient choice.
- These tools incentivize patients to select lower-cost physicians based on cost profiles.
- The accuracy of these cost-profiling tools in distinguishing physician costs has not been rigorously evaluated.
Purpose of the Study:
- To evaluate the accuracy and reliability of physician cost-profiling tools.
- To determine the extent to which current methods can reliably distinguish between higher-cost and lower-cost physicians.
Main Methods:
- Aggregated claims data from four Massachusetts health plans (2004-2005).
- Used commercial software to define clinically homogeneous episodes of care.
- Calculated physician cost-profile scores and estimated reliability (signal-to-noise ratio) for each physician.
- Estimated misclassification rates in a two-tiered insurance system based on reliability.
Main Results:
- Median reliabilities varied significantly by specialty, from 0.05 (vascular surgery) to 0.79 (gastroenterology, otolaryngology).
- 59% of physicians had cost-profile scores with reliability below 0.70, indicating suboptimal precision.
- An estimated 22% of physicians would be misclassified in a two-tiered cost-based insurance product.
Conclusions:
- Current physician cost-profiling methods may yield misleading results due to low reliability.
- The accuracy of these tools is insufficient for reliably categorizing physicians into cost tiers.
- Misleading physician cost data could negatively impact patient choice and healthcare system efficiency.
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