Insurance plans that uses financial incentives and other methods to encourage patients to receive care from doctors who keep medical costs lower are becoming increasingly common. But these efforts may not be based on reliable estimates of doctor performance and may not achieve the intended savings, according to the to a new RAND Corporation study.
The first major assessment of physician cost profiling found that about one-fourth of the 13,788 physicians studied would be misclassified under the system of cost ranking commonly used by insurance plans, according to findings published in the March 18 edition of the New England Journal of Medicine.
Studying 28 physician specialties in detail, researchers found that only about 40 percent of physicians had cost profile scores that were at least 70 percent reliable -- a common threshold for reliability -- and fewer than 10 percent of physicians had cost profiles that were at least 90 percent reliable.
Among physicians in a hypothetical two-tiered insurance plan, nearly 40 percent of internists and nearly two-thirds of vascular surgeons labeled as lower cost were not lower cost, according to the RAND study. Physicians in surgical specialties, in particular, appear to have low reliability cost profile scores, while dermatologists' cost profile scores were the most reliable.
These ranking systems may be useful for some purposes, but they are not reliable enough at this point to make decisions about encouraging patients to see certain providers or excluding some doctors from insurance networks, Adams said. Much work remains to be done to improve these systems before they are used for high-stakes activities.
He said the current systems may be useful for efforts such as warning physicians that their treatment methods appear to cost more than those used by their peers and urging them to reexamine their practice styles.
While cost profiling shows promise as a strategy to reduce health costs, it cannot be successful until more-robust tools are developed to use claims data and other information to create reliable cost profiles for physicians.