Rethinking criteria for doctors' pay

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Rethinking criteria for doctors' pay

California is a testing ground for a program that would rate and

reward physicians.

http://www.latimes.com/business/la-fi-doctors15mar15,1,7387201.story

By Yi, Times Staff Writer

March 15, 2007

Should your doctors' pay be based on how well they care for you?

Health insurers, including the federally funded Medicare system,

think so.

They are making California a testing ground for standards that could

eventually be used to rate all physicians in the country, rewarding

them for keeping people healthy and costs down. Consumers could use

the information to choose their physicians, and health plans could

use it to determine pay or to drop low-performing doctors from their

networks of providers.

Proponents say such programs are needed to correct a system that now

rewards doctors even if they run up patient bills with excessive

treatments.

" We pay even if doctors make mistakes, run unnecessary tests and

have to redo their work, " said Lee, chief executive of Pacific

Business Group on Health, a California coalition of employers that

represent some of the largest buyers of health insurance in the

state.

Currently there is no national set of performance standards against

which doctors are measured. Many doctors warn that the standards

must be carefully crafted or they could penalize good doctors. They

point to performance measures recently introduced by some private

health plans that have been heavily criticized as unfair.

Although health insurers have created their own performance

measures, none has tied physician pay to such measures yet. But

California is a pioneer with a state system that rates physician

groups and financially rewards them with cash prizes for improving

preventive care and patient satisfaction. This week, the state also

joined a federal program to rate individual doctors.

" I keep telling doctors, no matter how good the food is at a

restaurant, if the service is bad, the customers won't come back, "

said Rebhun, an internist in Mission Hills and a medical

director for Torrance-based HealthCare Partners, one of the largest

medical groups in the state. It participates in a statewide program

that rewards doctor groups for performance.

Late last year, the Washington State Medical Assn., a physician

trade group, sued a local health plan that had tried to exclude some

doctors from its network of providers based on its review of their

performance. The suit is pending.

Blue Cross Blue Shield of Texas recently suspended rolling out its

physician performance ratings because of negative reaction by the

state's doctors, who said the ratings were incomplete and unfair.

In both cases, the health plans mainly used insurance claims data to

determine how doctors were performing. A physician might get a

negative review for failing to administer preventive care, such as

cervical cancer screening for an eligible female patient.

But there might be a reason why a doctor would not prescribe such a

screening, said Hanscom, a spokeswoman for the Washington

State Medical Assn. The patient might have had a hysterectomy, for

example.

Some doctors fear health plans may use performance standards to

undermine their medical authority and reward doctors who provide the

cheapest care.

" Our concern is that some of the plans may use efficiency as a code

word for cutting costs, " said Cecil , an internist in Winter

Park, Fla., and a chairman of the American Medical Assn.'s

board. " Right now there is no good definition of efficiency, and

looking at claims data doesn't tell you the full story. "

A report appearing today in the New England Journal of Medicine shed

further doubt on whether medical claims could paint a good picture

of a doctor's performance. Researchers from the Center for Studying

Health System Change, a nonprofit research institution, looked at

claims filed by nearly 2 million Medicare patients.

The report's authors determined that in many cases, so many doctors

had treated a single patient that it was nearly impossible to credit

particular physicians for the outcome of the treatment.

Federal health officials acknowledge that claims information is

incomplete, but they offer a starting point to measure doctors. This

week they announced that California was joining five other states in

a project that could eventually lead to national performance

standards for physicians.

The program would analyze insurance claims filed by Medicare

patients as well as by members of the state's three largest

commercial insurers, Blue Shield of California, Blue Cross of

California and PacifiCare Health Systems. The claims would then be

compiled to rate the performance of about 25,000 doctors in the

state — nearly the entire doctor population.

California already rates its medical groups through a voluntary

program. The state is well suited for that because of the relatively

large presence of health maintenance organizations, experts said. In

HMOs, a group of physicians are paid a capped amount to care for a

predetermined number of patients.

More than 200 doctor groups in California are part of the voluntary

program, called the Integrated Healthcare Assn., which rates their

performance and gives them financial rewards for improvement. Some

of the state's largest health insurers participate by funding the

rewards. Kaiser Permanente, the state's largest HMO, participates in

the ratings but has its own internal reward program.

Integrated Healthcare Assn. has paid $145 million in incentives

since it began in 2003, its officials said. They credited the

program with increasing cervical cancer screenings by more than

60,000 in 2005 among its medical groups.