Episode-based physician profiling: a guide to the perplexing

The impact of price transparency and competition on hospital costs: a research on all-payer claims databases

Background

Public reporting has been considered effective in reducing health care costs by mitigating information asymmetry in the market as payers have incorporated publicly available information mandates into pay-for-performance programs and value-based purchasing. Therefore, hospitals have faced increasing pressures to provide price transparency. Despite the widespread promotion of healthcare transparency, the effectiveness of public reporting has not yet been sufficiently understood. This study analyzed the impact of transparency policy and competition on hospital costs by taking the state operations of all-payer claims databases (APCDs) as a case of interest.

Methods

We employed a fixed-effects regression, which allows the generation of hospital-specific effects, in accordance with the suggestion by the Hausman test. The study samples comprise nonprofit and for-profit general acute care hospitals in the United States for 2011–2017. The finalized dataset ranges from 3547 observations in 2011 to 3405 observations in 2015 after removing missing values.

Results

We found that hospitals in the states with APCDs tend to bear higher average operating expenses than those without APCDs, which may indicate that states maintaining higher healthcare expenditures are more attentive to a price transparency initiative and tend to adopt APCDs. With regard to competition, the results showed that weak market competition is significantly associated with higher operating costs, supporting the traditional competition theory. However, the combined effect of APCDs and competition did not indicate a significant association with operating expenses. Further investigation showed a continued tendency for a weak intensity of competition to be linked to lower hospital operating costs in states without APCDs. For those located in non-APCD adopted states, market consolidation helped hospitals coordinate care more effectively, economize operating costs, and enjoy economies of scale due to their large size. Similar trends did not appear in APCD-adopted states except for in 2015.

Conclusions

This study observed limited evidence of the impact of APCDs and market competition. Our findings suggest that states need to make multifaceted efforts to contain hospital costs, not solely depending on the rollout of cost information or market competition. Market concentration may lead to coordinated care or cost economization in some cases. Still, the existing literature also demonstrates some potentially harmful impacts of increased concentration in the healthcare market, such as inefficient use of resources, unilateral market power, and deterrence of innovation. The introduction of a price transparency tool may require additional policy actions that take market competition into consideration.

Supplementary Information

The online version contains supplementary material available at 10.1186/s12913-022-08711-x.

Episode detection based on personalized intensity of care thresholds: a schizophrenia case study

BACKGROUND

Schizophrenia Spectrum Disorder (SSD) is characterized by its chronic, episodic nature. The clear definition of such episodes is essential for various clinical and research purposes. Most current definitions of episodes in SSD are based on either hospitalizations or on symptom scales. Both have drawbacks; symptom scales are measured infrequently, while hospitalization rates are often affected by policy. This study presents an approach for defining episodes in healthcare data that does not suffer such drawbacks.

METHODS

Healthcare use of 13,155 SSD patients in the Northern Netherlands with up to 12 years of follow-up was available. Patient-level structural changes in the trend of healthcare use costs were determined using Exponentially Weighted Moving Average (EWMA) control charts. Control charts restart with updated parameters after a detected structural change. Episodes were defined using these structural changes. The resulting episodes were validated by investigating their association with the Global Assessment of Functioning (GAF) scale.

RESULTS

The mean number of episodes was 0.61 (sd: 0.60) per patient per year. For the sub-group without hospitalizations this was 0.51 (sd: 0.71). Average episode duration of the sub-group (147 days, sd: 309.4) was similar to that of the full sample (150 days, sd: 305.5). A significant inverse association was identified between GAF scores and the episode-state indicator.

CONCLUSIONS

The repeated application of EWMA control charts based on healthcare-intensity is a feasible and promising tool for quantifying patient-level healthcare episodes. The validation using GAF scores indicates that our episode indicator is associated with lower levels of global functioning. Results for individuals without hospitalizations indicate that the method is robust with regard to changes in healthcare policy.

Physician engagement: a concept analysis

The term "physician engagement" is used quite frequently, yet it remains poorly defined and measured. The aim of this study is to clarify the term "physician engagement." This study used an eight step-method for conducting concept analyses created by Walker and Avant. MEDLINE, EMBASE, and the Cochrane Central Register of Controlled Trials were searched on February 14, 2019. No limitations were put on the searches with regard to year or language. Results identify that the term "physician engagement" is regular participation of physicians in (1) deciding how their work is done, (2) making suggestions for improvement, (3) goal setting, (4) planning, and (5) monitoring of their performance in activities targeted at the micro (patient), meso (organization), and/or macro (health system) levels. The antecedents of "physician engagement" include accountability, communication, incentives, interpersonal relations, and opportunity. The results include improved outcomes such as data quality, efficiency, innovation, job satisfaction, patient satisfaction, and performance. Defining physician engagement enables physicians and health care administrators to better appreciate and more accurately measure engagement and understand how to better engage physicians.

Episode-Based Approaches to Measuring Health Care Quality

Most currently available quality measures reflect point-in-time provider tasks, providing a limited and fragmented assessment of care. The concept of episodes of care could be used to develop quality measurement approaches that reflect longer periods of care. With input from clinical experts, we constructed episode-of-care frameworks for six illustrative conditions and identified potential gaps and measure development priority areas. Episode-based measures could assess changes in health outcomes ("delta measures"), the amount of time during an episode in which a patient has suboptimal health status ("integral measures"), quality contingent upon events occurring previously ("contingent measures"), and composites of measures throughout the episode. This article identifies a number of challenges that will need to be addressed to advance operationalization of episode-based quality measurement.

Policy-Oriented Research on Improved Physician Incentives for Higher Value Health Care

Policy makers (both public and private) are seeking ways to improve the value delivered within our health care system, that is, using fewer resources to provide the same benefit to patients, or using equivalent resources to provide more benefit. One strategy is to alter the predominant fee‐for‐service (FFS) economic incentives in the current system. To inform such policy changes, this paper identifies areas in which little is known about the effects of specific incentives (FFS, salary, etc.) on the two components of value: resource use and quality. Specific suggestions are offered regarding research that would be informative for policy makers, focusing on fundamental “building block” studies rather than overall evaluations of complex interventions, such as accountable care organizations. This research would better identify critical aspects of the FFS model and salary‐based payments that are particularly problematic, as well as situations in which FFS or salary may be less problematic. The research would also explore when alternatives, such as episode‐based payment might be feasible, or simply be hypothetical solutions. The availability of electronic health record‐based data in various delivery systems would allow many of these studies to be accomplished in 3–5 years with budgets manageable by public and private funding sources.

Physicians with the least experience have higher cost profiles than do physicians with the most experience

Health plans and Medicare are using cost profiles to identify which physicians account for more health care spending than others. By identifying the costliest physicians, health plans and Medicare hope to craft policy interventions to reduce total health care spending. To identify which physician types, if any, might be costlier than others, we analyzed cost profiles created from health plan claims for physicians in Massachusetts. We found that physicians with fewer than ten years of experience had 13.2 percent higher overall costs than physicians with forty or more years of experience. We found no association between costs and other physician characteristics, such as having had malpractice claims or disciplinary actions, board certification status, and the size of the group in which the physician practices. Although winners and losers are inevitable in any cost-profiling effort, physicians with less experience are more likely to be negatively affected by policies that use cost profiles, unless they change their practice patterns. For example, these physicians could be excluded from high-value networks or receive lower payments under Medicare's planned value-based payment program. We cannot fully explain the mechanism by which more-experienced physicians have lower costs, but our results suggest that the more costly practice style of newly trained physicians may be a driver of rising health care costs overall.

Effect of cost efficiency reporting on utilization by physician specialists: A difference-indifference study

Summary

Objective:

To assess whether health plan implementation of specialist profile reports not associated with any health plan administered reward or consequence that measured physician cost efficiency relative to peers, and shared with specialists and primary care referral sources only, were associated with changes in specialist behaviour.

Data source/study setting:

Blue Care Network of Michigan is a non-profit statewide Health Maintenance Organization and wholly owned subsidiary of Blue Cross Blue Shield of Michigan. This study used administrative data from 2002 to 2006 and included only providers and adult (ages 18–65) commercial membership located in Southeastern Michigan.

Study design:

A difference-indifference study design of before and after specialist cost efficiency reporting on six specialties to both specialists and primary care referral sources, but not health plan members, to determine whether specialists who performed worse than peers changed the level of utilization of their own physician services without any direct health plan reward or consequence.

Principal findings:

Substantive changes were noted for interventional cardiology (-32.3%, P ≤ 0.01), orthopaedics (-13.3%, P ≤ 0.01) and otolaryngology (-15.9%, P ≤ 0.02). Less established, yet negative changes were noted for ophthalmology (-11.9%, P ≤ 0.01), gastroenterology (-3.2%, P = 0.23) and urology (-3.1%, P = 0.52).

Conclusions:

Simple and transparent reports on specialist cost efficiency distributed to referral sources and specialists using a more laissez-faire style reporting only health plan programme can engage providers and be associated with reductions in utilization. Possible mechanisms include explicit pressure from referral sources or self-motivated change by specialists.

The challenge of attribution: responsibility for population health in the context of accountable care

One of the 3 goals for accountable care organizations is to improve population health. This will require that accountable care organizations bridge the schism between clinical care and public health. But do health care delivery organizations and public health agencies share a concept of "population"? We think not: whereas delivery systems define populations in terms of persons receiving care, public health agencies typically measure health on the basis of geography. This creates an attribution problem, particularly in large urban centers, where multiple health care providers often serve any given neighborhood. We suggest potential innovations that could allow urban accountable care organizations to accept accountability, and rewards, for measurably improving population health.

A nonparametric statistical method that improves physician cost of care analysis

OBJECTIVE

To develop a compositing method that demonstrates improved performance compared with commonly used tests for statistical analysis of physician cost of care data.

DATA SOURCE

Commercial preferred provider organization (PPO) claims data for internists from a large metropolitan area.

STUDY DESIGN

We created a nonparametric composite performance metric that maintains risk adjustment using the Wilcoxon rank-sum (WRS) test. We compared the resulting algorithm to the parametric observed-to-expected ratio, with and without a statistical test, for stability of physician cost ratings among different outlier trimming methods and across two partially overlapping time periods.

PRINCIPAL FINDINGS

The WRS algorithm showed significantly greater within-physician stability among several typical outlier trimming and capping methods. The algorithm also showed significantly greater within-physician stability when the same physicians were analyzed across time periods.

CONCLUSIONS

The nonparametric algorithm described is a more robust and more stable methodology for evaluating physician cost of care than commonly used observed-to-expected ratio techniques. Use of such an algorithm can improve physician cost assessment for important current applications such as public reporting, pay for performance, and tiered benefit design.

Consumers' and providers' responses to public cost reports, and how to raise the likelihood of achieving desired results

There is tremendous interest in different approaches to slowing the rise in US per capita health spending. One approach is to publicly report on a provider's costs--also called efficiency, resource use, or value measures--with the hope that consumers will select lower-cost providers and providers will be encouraged to decrease spending. In this paper we explain why we believe that many current cost-profiling efforts are unlikely to have this intended effect. One of the reasons is that many consumers believe that more care is better and that higher-cost providers are higher-quality providers, so giving them information that some providers are lower cost may have the perverse effect of deterring them from accessing these providers. We suggest changes that can be made to content and design of public cost reports to increase the intended consumer and provider response.

Public reporting of cost and quality information in orthopaedics

BACKGROUND

Public reporting of patient health outcomes offers the potential to incentivize quality improvement by fostering increased accountability among providers. Voluntary reporting of risk-adjusted outcomes in cardiac surgery, for example, is viewed as a "watershed event" in healthcare accountability. However, public reporting of outcomes, cost, and quality information in orthopaedic surgery remains limited by comparison, attributable in part to the lack of standard assessment methods and metrics, provider fear of inadequate adjustment of health outcomes for patient characteristics (risk adjustment), and historically weak market demand for this type of information.

QUESTIONS/PURPOSES

We review the origins of public reporting of outcomes in surgical care, identify existing initiatives specific to orthopaedics, outline the challenges and opportunities, and propose recommendations for public reporting of orthopaedic outcomes.

METHODS

We performed a comprehensive review of the literature through a bibliographic search of MEDLINE and Google Scholar databases from January 1990 to December 2010 to identify articles related to public reporting of surgical outcomes.

RESULTS

Orthopaedic-specific quality reporting efforts include the early FDA adverse event reporting MedWatch program and the involvement of surgeons in the Physician Quality Reporting Initiative. Issues that require more work include balancing different stakeholder perspectives on quality reporting measures and methods, defining accountability and attribution for outcomes, and appropriately risk-adjusting outcomes.

CONCLUSIONS

Given the current limitations associated with public reporting of quality and cost in orthopaedic surgery, valuable contributions can be made in developing specialty-specific evidence-based performance measures. We believe through leadership and involvement in policy formulation and development, orthopaedic surgeons are best equipped to accurately and comprehensively inform the quality reporting process and its application to improve the delivery and outcomes of orthopaedic care.

The relationship between office system tools and evidence-based care in primary care physician practice

A number of office system tools have been developed to improve the rates of preventive services and enhance the quality of medical care in practice settings. New approaches to measuring physician adherence to evidence-based standards of treatment, offer a unique opportunity to examine the link between the use of office system tools and evidence-based practices in primary care. Using episode-based profiling measures of adherence as the criterion, results from this investigation suggest that the application of simple physician reminders can be an effective technique for promoting evidence-based treatment. The data also reveal that the influence of health information technology (HIT) resources on adherence was not exclusively positive. Specifically, adherence to evidence-based standards was higher for primary care practices that employed HIT resources judiciously. In contrast, extensive use of personal digital assistants was negatively associated with adherence. Despite concerns directed towards the new generation of episode-based profiling measures, results from this research indicate that the measures behave similarly to traditional measures of quality.

Physician cost profiling--reliability and risk of misclassification

BACKGROUND

Insurance products with incentives for patients to choose physicians classified as offering lower-cost care on the basis of cost-profiling tools are increasingly common. However, no rigorous evaluation has been undertaken to determine whether these tools can accurately distinguish higher-cost physicians from lower-cost physicians.

METHODS

We aggregated claims data for the years 2004 and 2005 from four health plans in Massachusetts. We used commercial software to construct clinically homogeneous episodes of care (e.g., treatment of diabetes, heart attack, or urinary tract infection), assigned each episode to a physician, and created a summary profile of resource use (i.e., cost) for each physician on the basis of all assigned episodes. We estimated the reliability (signal-to-noise ratio) of each physician's cost-profile score on a scale of 0 to 1, with 0 indicating that all differences in physicians' cost profiles are due to a lack of precision in the measure (noise) and 1 indicating that all differences are due to real variation in costs of services (signal). We used the reliability results to estimate the proportion of physicians in each specialty whose cost performance would be classified inaccurately in a two-tiered insurance product in which the physicians with cost profiles in the lowest quartile were labeled as "lower cost."

RESULTS

Median reliabilities ranged from 0.05 for vascular surgery to 0.79 for gastroenterology and otolaryngology. Overall, 59% of physicians had cost-profile scores with reliabilities of less than 0.70, a commonly used marker of suboptimal reliability. Using our reliability results, we estimated that 22% of physicians would be misclassified in a two-tiered system.

CONCLUSIONS

Current methods for profiling physicians with respect to costs of services may produce misleading results.

Incorporating statistical uncertainty in the use of physician cost profiles

BACKGROUND

Physician cost profiles (also called efficiency or economic profiles) compare the costs of care provided by a physician to his or her peers. These profiles are increasingly being used as the basis for policy applications such as tiered physician networks. Tiers (low, average, high cost) are currently defined by health plans based on percentile cut-offs which do not account for statistical uncertainty. In this paper we compare the percentile cut-off method to another method, using statistical testing, for identifying high-cost or low-cost physicians.

METHODS

We created a claims dataset of 2004-2005 data from four Massachusetts health plans. We employed commercial software to create episodes of care and assigned responsibility for each episode to the physician with the highest proportion of professional costs. A physicians' cost profile was the ratio of the sum of observed costs divided by the sum of expected costs across all assigned episodes. We discuss a new method of measuring standard errors of physician cost profiles which can be used in statistical testing. We then assigned each physician to one of three cost categories (low, average, or high cost) using two methods, percentile cut-offs and a t-test (p-value < or = 0.05), and assessed the level of disagreement between the two methods.

RESULTS

Across the 8689 physicians in our sample, 29.5% of physicians were assigned a different cost category when comparing the percentile cut-off method and the t-test. This level of disagreement varied across specialties (17.4% gastroenterology to 45.8% vascular surgery).

CONCLUSIONS

Health plans and other payers should incorporate statistical uncertainty when they use physician cost-profiles to categorize physicians into low or high-cost tiers.