Corporate group turns to doctor rating system

Companies band together to monitor physicians' performance as a way to control insurance costs.

By Robert Kazel — Posted April 26, 2004

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A coalition of 28 large employers intends to create report cards grading physicians on quality and cost efficiency, and will use the scores to try to persuade patients to select doctors who score the best.

The grades could be used to undergird pay-for-performance incentives or tiered physician networks, in which patients' co-payments or co-insurance differ depending on physicians' good or bad marks.

The initiative, Care Focused Purchasing, includes J.C. Penney Corp.; the Pepsi Bottling Group; Sears, Roebuck and Co.; Sprint Corp.; Texas Instruments Inc.; BellSouth Corp.; and Xerox Corp.

The data for assigning grades will come from coalition employers as well as from insurance companies that agree to be affiliated with the coalition. So far, CIGNA Corp., Humana Inc. and Empire BlueCross BlueShield of New York have signed on to the program. Other plans are in discussion with the coalition, said Eric Grossman, a principal with Mercer Human Resources Consulting. Mercer helped organize the coalition over the past year.

Quality measures would look at the past two years of claims and would be based on how well doctors have adhered to evidence-based treatment protocols already issued by specialty medical societies or other organizations such as the National Committee on Quality Assurance, Grossman said. A panel consisting of physicians, primarily from academia, and medical officers from several large health plans will come up with a set of quality and efficiency standards that doctors will be expected to meet.

For cost-efficiency measurements, doctors will be evaluated across the complete spectrum of the treatment of a patient's condition. "We're not looking to judge effectiveness based on unit cost," Grossman said. "If Dr. Smith charges $150 or Dr. Jones charges $200 for an office visit, we're not going to say Dr. Smith is more efficient."

Employers and health plans will be able to use the report cards differently, he said. For instance, some may simply publish lists of doctors' names with "star" or numerical ratings, while others might use the grades for physician incentive pay programs or to place doctors in different tiers within networks.

Executives at one of the founding employers of the coalition, New York-based insurer Assurant Inc., concluded a new approach to health care coverage was needed after seeing most of its HMO premiums rise by 15% to 25% annually in recent years, said Sheila Sweeney, vice president of employee benefits.

Some insurers may begin to use the grading system as part of new product designs as early as next year, Grossman said.

In the past, many physicians have been skeptical of the accuracy or usefulness of performance scorecards, said Bernard Rosof, MD, a Long Island, N.Y., internist and gastroenterologist who is co-chair of the AMA's Physician Consortium for Performance Measurement.

Report cards may be meaningless if they don't adequately account for physicians' different patient bases, Dr. Rosof said.

"If the quality standards are created by good methodologists, I have no problem with them," he said. "My concern is whether this approach is simplistic ... [if] it doesn't take into account the number of patients the physician sees and makes risk adjustments based on severity and age."

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