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Cost profiles: should the focus be on individual physicians or physician groups?
Ateev Mehrotra1, John L Adams, J William Thomas
1RAND, Pittsburgh, Pennsylvania, USA. mehrotra@rand.org
Health Affairs (Project Hope)
|August 4, 2010
Summary
Health plans use physician cost profiles for tiered networks to control costs. While physician group profiles are more reliable, they don't predict individual physician performance, indicating a need for better methods.
Area of Science:
- Health economics
- Healthcare policy
- Medical practice management
Background:
- Rising healthcare expenditures necessitate cost-containment strategies.
- Health plans utilize tiered networks and physician cost profiles to incentivize patient selection of lower-cost providers.
- Concerns exist regarding the statistical reliability of individual physician cost profiles.
Purpose of the Study:
- To empirically evaluate the statistical reliability and predictive validity of individual physician cost profiles versus physician group profiles.
- To compare the effectiveness of two distinct approaches for creating provider cost profiles in tiered network strategies.
Main Methods:
- Analysis of healthcare cost data from Massachusetts.
- Statistical comparison of the reliability of individual physician cost profiles and physician group profiles.
- Assessment of the predictive accuracy of group profiles for individual physician performance.
Main Results:
- Physician group profiles demonstrate greater statistical reliability compared to individual physician profiles.
- However, physician group profiles were found to be poor predictors of individual physician cost performance within the group.
- The study highlights limitations in current methods for assessing provider cost-efficiency.
Conclusions:
- While grouping physicians may improve profile reliability, it does not effectively predict individual physician cost behavior.
- Current methods for developing provider cost profiles are insufficient for accurately guiding tiered network strategies.
- Development of improved methodologies for creating reliable and valid provider cost profiles is essential for effective healthcare cost management.
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