Wisconsin group to measure physician quality, efficiency

The state's insurers, businesses and physicians have banded together to fund a vast claims data warehouse.

By Kevin B. O’Reilly — Posted Jan. 23, 2006

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As early as 2007, Wisconsin could see its first public report analyzing the efficiency of physician practices based on a statewide repository of health insurance claims data. Here's the twist: Wisconsin physicians are the ones leading the effort.

Doctors traditionally have been skeptical of health plans' efforts to rate how efficiently they care for their patients. They've often said the methodology is flawed, the sample sizes too small and insurers' motives suspect. But the newly formed Wisconsin Health Information Organization is looking to address those concerns and provide doctors with insight on how they can improve their practices' quality and efficiency.

"That is precisely why we wanted to be at the table," said Wisconsin Medical Society Chief Operating Officer Linda Syth. "If you aren't part of the dialogue, you can't give input into how data are used or challenge wasteful, ineffective uses of the information."

The medical society is one of nine insurer, business and physician groups that founded WHIO in November 2005. With large insurers such as Blue Cross Blue Shield of Wisconsin, Humana and UnitedHealthcare of Wisconsin participating, the repository will have claims data for about half of the state's privately insured patients. The creators' hope is that smaller plans also will contribute.

Clyde "Bud" Chumbley, MD, CEO of the physician-owned Medical Associates Health Centers, based in Menomonee Falls, Wis., wants WHIO to have a big enough sample size to present some valid efficiency data to the marketplace, something he said is lacking now.

"Each insurance company has their own black box where they try to give you efficiency measures," said Dr. Chumbley, who sits on the board of the physician-led Wisconsin Collaborative for Healthcare Quality. "The criteria are sketchy. It's just something they're selling to the marketplace as valid, but the sample size is minimal." Currently, Dr. Chumbley said he feels as though he's "at the mercy of a bunch of large corporations who are paying someone to come up with these things."

Insurance executives involved in WHIO say they understand the frustration. "From the perspective of a practicing physician, one payer's information will be limited to that portion of the practice," said Lowell Keppel, MD, medical director for Blue Cross Blue Shield of Wisconsin. "The physician is interested in quality across the entire practice. WHIO ... will get us much closer to representing the entire practice."

Health leaders recognize need

WHIO is an outgrowth of the Wisconsin Collaborative for Healthcare Quality, a group of nine noncompeting physician groups and hospital CEOs formed in 2002 to publicly report physicians' performance on quality-of-care measures. About 65% of Wisconsin doctors have participated in the collaborative, which issued its first report on 42 evidence-based quality measures in October 2003.

"We were already working on the quality performance information," said John Toussaint, MD, CEO of ThedaCare, based in Appleton, Wis., and chair of WHIO's board of directors. "We wanted to match quality performance with efficiency, and we knew we wouldn't be able to get that done unless we brought the payers to the table."

Skyrocketing health costs in Wisconsin have added urgency to these efforts. A 2002 study of $470 million in Milwaukee-area claims showed that costs were 55% higher than in other major Midwestern metro areas, according to research by the consulting firm William M. Mercer.

By giving physicians a way to measure and improve upon their practices' efficiency, the WHIO effort could help reduce these costs, those involved in the initiative said.

WHIO is now putting together a request for proposals from vendors to manage and analyze the health claims data using the episode treatment group methodology. By adjusting the case mix and divvying up the claims data according to a patient's complete episode of care, WHIO leaders say ETGs can provide a holistic picture of how well and how efficiently a physician group cares for patients.

"You can't just have efficiency measures or just quality measures," Dr. Toussaint said. "You've got to have both. Then you're able to really say, 'Guess what? This guy over here has the same quality results, but is three times more expensive.' "

Dr. Toussaint and others involved in the WHIO effort acknowledged that there are still qualms with the episode treatment group approach to evaluating physicians' efficiency, but they said it's better than a system that could be forced on doctors by insurers or politicians.

Some of the more than 100 physicians ThedaCare employs "probably think I'm nuts" to be leading the WHIO effort, Dr. Toussaint said.

"This is cutting-edge stuff. We're upsetting the apple cart. Any time you do that, do you expect everybody to think it's a great idea? No, but that's what leadership is all about," he said.

AMA policy on managed care makes clear that physicians are obliged to put patients' needs first when considering any cost-related initiatives, said Priscilla Ray, MD, a Houston psychiatrist who chairs the Council on Ethical and Judicial Affairs.

"Efficiency in health care is a good thing, at least in concept," Dr. Ray said, noting that a final judgment on the Wisconsin effort must wait until a precise evaluative methodology is chosen. "We won't really know until we see more."

Other states, such as Arizona, California, Illinois, Massachusetts and New Hampshire, are at work on efforts similar to WHIO. But the depth and breadth of data Wisconsin plans to collect could surpass those initiatives, said David Dranove, PhD, a professor at Northwestern University's Kellogg School of Management in Evanston, Ill., who is researching the effects of quality report cards on health care markets.

"Wisconsin is not years ahead of other states, but it's certainly right at the frontier," he said.

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