Physician Performance Measurement

A Key to Higher Quality and Lower Cost Growth or a Lost Opportunity?

News Release
June 4, 2009

Alwyn Cassil (202) 264-3484 or

WASHINGTON, DC—Physicians wield significant influence—directly and indirectly—over the quality and cost of health care, but early efforts to measure physician performance may prove a lost opportunity to improve the nation’s health care system if methodological and other shortcomings are not addressed, according to a commentary published today by the Center for Studying Health System Change (HSC).

Although the United States spends more than $2 trillion annually on health care, patient outcomes lag other developed countries that spend far less per capita, according to the Commentary by Debra A. Draper, Ph.D., a senior fellow at HSC, a nonpartisan policy research organization funded in part by the Robert Wood Johnson Foundation (RWJF), which supported the Commentary through its general support of HSC.

"The disconnect between money spent on health care and the often less-than-stellar results has sparked national awareness of the critical importance of measuring and improving health care quality and slowing spending growth through increased efficiency," Draper points out. "As a result, nascent efforts are underway to measure and improve physician performance on both quality and cost dimensions."

To date, most performance measurement programs have been developed by health plans and operate under a variety of names, such as the Aexcel Specialist Network (Aetna), Blue Precision (Blue Cross Blue Shield), Care Network (CIGNA), Preferred Network (Humana), and Premium Designation Program (UnitedHealthcare).

Typically, health plans use the results only to inform consumers; in some cases, consumers have incentives, such as reduced copayments, to use higher-performing physicians. Plans rarely pay bonuses to physicians deemed high performing—quality and efficiency improvements are achieved to the extent that patient volume shifts to higher-performing physicians as a result of changes in physician referrals and consumer choices and lower-performing physicians improving the care they provide.

Although plans’ programs are broadly similar, their methodologies often differ on such dimensions as the specific measures used, sample-size requirements, and the comparative emphasis placed on quality vs. cost measures, according to Draper. Consequently, gauging the comparability of individual plan results is difficult, and physicians can be deemed high performing by one plan but not another.

"Measuring performance is an important and necessary initial step to improving the quality and efficiency of care provided, but measurement alone is likely insufficient to prompt physicians to improve performance," Draper states. "Support to improve performance and rewards to encourage and reinforce desired behaviors also are needed. However, these elements are largely absent from many health plan efforts, and when they do exist, they are inadequate to bring about meaningful or sustained performance improvement."

Key challenges to effective physician performance measurement include:

"Although the challenges outlined here are formidable, failure to take the appropriate steps to improve the current state of physician performance measurement may result in a lost opportunity to improve the quality and efficiency of the underperforming U.S. health care system," Draper concludes.

The Commentary—Physician Performance Measurement: A Key to Higher Quality and Lower Cost Growth or a Lost Opportunity?—is available here.

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The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely research on the nation’s changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is funded principally by the Robert Wood Johnson Foundation and is affiliated with Mathematica Policy Research, Inc.