|Physician Cost Profiling Can Vary Widely, Study Finds
Profiles created for physicians based on the cost of the
care they provide can vary widely, depending upon the methods used by
insurance companies to create the profiles, a RAND Corp. study found.
Researchers said the findings add to the concern about
the accuracy of physician cost profiles being created by insurance
companies aimed at encouraging patients to visit low-cost physicians.
Physician cost profiles are still "a work in progress,"
said lead author Dr. Ateev Mehrotra, a RAND researcher and a professor
at the University of Pittsburgh School of Medicine. The U.S. Department
of Labor funded the study.
RAND researchers analyzed information from four
commercial health plans in Massachusetts that enroll a total of 1.1
million adults. The findings were published in the Annals of Internal
The study found that between 17 percent and 61 percent
of physicians would be assigned to a differentcost category, depending
on the methods used. Cost categories in conjunction with quality scores
are used to assign physicians into performance tiers.
For example, a patient may have to make a $15 co-pay to
see a physician assigned to the highest performing tier, but that
co-pay might increase to $30 if the physician is in a lower performing
tier. If physicians are assigned to a lower performing tier, their
patients might leave them and switch to a physician in a higher
RAND researchers also examined the methods that
insurance companies use to assign responsibility for the cost of care
when a patient sees multiple doctors.
For example, one rule might assign the cost of care for
a patient to the physician who accounts for the highest percentage of
patient visits. Another rule could assign the cost of care for a
patient to the physician who accounts for the highest percentage of the
costs incurred in delivering care.
Mehrotra said that an important step for the future is
for insurance plans to be more transparent about the methods they use
to assign care costs and suggested that insurance plans enlist
physicians into efforts to create attribution rules used for cost
Address: Rand Corp., P.O. Box 2138, 1776 Main Street, Santa Monica, CA 90407-2138; (310) 393-0411, www.rand.org.