From Our 2010 Archives

Ranking Doctors by Cost-Profile May Not Help Save Money

WEDNESDAY, March 17 (HealthDay News) -- Less expensive physicians may not help reduce U.S. health-care costs, a new study suggests.

Insurance plans that use 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 RAND Corp., a non-profit research organization.

In the study, researchers looked at 13,788 physicians and found that about one-quarter of them would be misclassified under the system of cost-profiling commonly used by insurance plans.

"Our findings raise questions about the utility of cost-profiling tools for high-stakes activities such as tiered health plans and the likelihood that wide use of these strategies will reduce health-care spending," study lead author John L. Adams, a senior statistician at RAND, said in a news release. "Consumers, physicians and those who pay for health care are all at risk of being misled by the results from these tools."

Adams said these ranking systems may be useful for some purposes, such as warning physicians that their treatment methods appear to cost more than those used by their peers and suggesting they re-examine their practice styles.

However, the ranking systems "are not reliable enough at this point to make decisions about encouraging patients to see certain providers or excluding some doctors from insurance networks. Much work remains to be done to improve these systems before they are used for high-stakes activities," Adams stated.

The findings are published in the March 18 issue of the New England Journal of Medicine.

-- Robert Preidt

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SOURCE: RAND Corp., news release, March 17, 2010