Reformulating provider profiling by grouping providers treating similar patients prior to evaluating performance

Standard approaches to comparing health providers' performance rely on hierarchical logistic regression models that adjust for patient characteristics at admission. Estimates from these models may be misleading when providers treat different patient populations and the models are misspecified. To address this limitation, we propose a novel profiling approach that identifies groups of providers treating similar populations of patients and then evaluates providers' performance within each group. The groups of providers are identified using a Bayesian multilevel finite mixture of general location models. To compare the performance of our proposed profiling approach to standard methods, we use patient-level data from 119 skilled nursing facilities in Massachusetts. We use simulated and observed outcome data to explore the performance of these profiling methods in different settings. In simulations, our proposed method classifies providers to groups with similar patients' admission characteristics. In addition, in the presence of limited overlap in patient characteristics across providers and misspecifications of the outcome model, the provider-level estimates obtained using our approach identified providers that under- and overperformed compared to the standard regression-based approaches more accurately.