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Published on: January 6, 2011
The Challenge of Measuring Surgeon Spending for Payment Policies
Paige VonAchen1,2, Rodney A Hayward1,3,4, Edward C Norton1,4,5
1Institute for Healthcare Policy and Innovation, University of Michigan, Ann Arbor, MI.
Objective:
Our objective was to understand the reliability of profiling surgeons on average health care spending.
Summary Of Background Data:
Under its Merit-based Incentive Payment System (MIPS), Medicare will measure surgeon spending and tie performance to payments. Although the intent of this cost-profiling is to reward low-cost surgeons, it is unknown whether surgeons can be accurately distinguished from their peers.
Methods:
We used Michigan Medicare and commercial payer claims data to construct episodes of surgical care and to calculate average annual spending for individual surgeons. We then estimated the "reliability" (ie, the ability to distinguish surgeons from their peers) of these cost-profiles and the case-volume that surgeons would need in order to achieve high reliability [intraclass correlation coefficient (ICC) >0.8]. Finally, we calculated the reliability of 2 alternative methods of profiling surgeons (ie, using multiple years of data and grouping surgeons by hospitals).
Results:
We found that annual cost-profiles of individual surgeons had poor reliability; the ICC ranged from <0.001 for CABG to 0.061 for cholecystectomy. We found that few surgeons in the state of Michigan have sufficient case-volume to be reliably compared; 1% had the minimum yearly case. Finally, we found that the reliability of the cost-profiles can be improved by measuring spending at the hospital-level and/or by incorporating additional years of data.
Conclusion:
These findings suggest that the Medicare program should measure surgeon spending at a group level or incorporate multiple years of data to reduce misclassification of surgeon performance in the MIPS program.
Insights
Surgeon cost profiling under Medicare
Area of Science:
- Health economics
- Surgical outcomes analysis
- Healthcare policy
Background:
- Medicare's Merit-based Incentive Payment System (MIPS) aims to link surgeon performance to payments based on healthcare spending.
- Accurate and reliable assessment of surgeon cost profiles is crucial for the MIPS program's success.
- The reliability of distinguishing surgeons based on their average healthcare spending is currently unknown.
Purpose of the Study:
- To assess the reliability of profiling surgeons based on average healthcare spending.
- To determine the case volume required for reliable surgeon cost comparisons.
- To evaluate alternative methods for improving the reliability of surgeon cost profiling.
Main Methods:
- Utilized Michigan Medicare and commercial payer claims data to construct surgical care episodes.
- Calculated average annual spending for individual surgeons.
- Estimated the reliability (intraclass correlation coefficient) of cost-profiles and determined necessary case volumes for high reliability (ICC >0.8).
- Assessed reliability using multiple years of data and hospital-level grouping.
Main Results:
- Annual cost profiles demonstrated poor reliability, with ICCs ranging from <0.001 (CABG) to 0.061 (cholecystectomy).
- A small percentage of surgeons (1%) in Michigan had sufficient case volume for reliable comparison.
- Reliability improved by measuring spending at the hospital level and/or incorporating multiple years of data.
Conclusions:
- Current annual surgeon cost profiling exhibits low reliability, risking misclassification of performance.
- Medicare's MIPS program should consider group-level spending or multi-year data for more accurate surgeon assessment.
- Hospital-level or multi-year data aggregation can enhance the reliability of surgeon cost profiling.
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