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Physician Cost Profiling-Reliability and Risk of Misclassification: Detailed Methodology and Sensitivity Analyses
Rand Health Quarterly
|January 14, 2017
Summary
Physician cost profiling methods often lack reliability, leading to misclassification of doctors and raising concerns about healthcare cost-control strategies. This study offers methods to assess reliability and misclassification probabilities for better transparency.
Area of Science:
- Health Services Research
- Health Economics
- Medical Informatics
Background:
- Healthcare purchasers use physician cost profiling to control costs.
- Methods include network contracting and differential copayments.
- Reliability of these cost-analysis methods is under-examined.
Purpose of the Study:
- Analyze the reliability of physician cost profiling methods.
- Explain the relationship between reliability and misclassification.
- Provide a practical method to calculate reliability and misclassification.
Main Methods:
- Utilized claims data from four Massachusetts health plans.
- Assessed reliability based on observation count, resource variation, and random score variation.
- Developed methods to calculate reliability and misclassification probabilities.
Main Results:
- Most physicians' cost profiles did not meet reliability thresholds.
- Reliability varied significantly by medical specialty.
- Low reliability increases the chance of physician misclassification (cost and quality).
Conclusions:
- Current physician cost profiling methods raise concerns about their utility and results.
- The proposed methods enhance transparency in profiling systems.
- Informed debate on profiling systems is needed, considering costs and benefits.
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