Private Insurers Jump on Physician Ranking

Stanley Feld M.D.,FACP,MACE

I previously stated that Pay for Performance (P4P) is another way of decreasing physicians’ reimbursement using misleading medical claims data. The raw medical claims data is an easy but inaccurate way to judge physician performance. If someone really wanted to help patients understand quality of medical care in order to choose their physician it could be done correctly. The only concern of private insurers seems to be their bottom line.

I have been accused of having a vested interest in protecting physicians.

My interest is protecting consumers from dumb policies that will result in decreasing access to quality care and promoting a further gaming of the healthcare system by all stakeholders except the patient.
Immediately after the judge’s decision on releasing raw medical claims data, the insurance industry started rating physician on the basis of medical claims data.

New York Attorney General Andrew Cuomo sent letters to Aetna and Cigna warning them that the doctor-rating systems they use to guide consumers are confusing and could be considered deceptive. “ Health insurance companies create physician ranking programs to recommend certain primary care physicians and specialists to consumers. In his letter to Aetna and Cigna Healthcare, the Attorney General describes the problematic design of the physician ranking programs created by Aetna and Cigna Healthcare: the rankings are based on claims data, which is well-known to carry several significant risks of error when used to rank individual physicians; the insurers do not disclose the accuracy rate of their rankings; and insurers have a profit motive to recommend doctors who cost less, not necessarily those who are most qualified.”

Cuomo told UnitedHealth in July not to roll out its rating program in New York without his approval. “We’re not opposed to the ranking systems in and of themselves, but we think these may have problems,” spokesman Jeffrey Lerner told Health Blog.

The letters also describe how inaccurate physician ranking programs may cause financial harm to consumers. Some employers steer employees to the doctors preferred by the insurer by lowering co-payments or deductibles. Consequently, employees who choose not to go to the preferred doctors could pay more.

New York’s Cuomo further warns that rankings based on claims data can be badly flawed, and that the insurers have conflicts of interest. He’s asking the health plans for a “full justification.”

The stern letters follow a recent lawsuit filed by Connecticut doctors in Superior Court in Danbury. The Fairfield County Medical Association and a group of orthopedists accuse Cigna and UnitedHealth of libel, unfair trade practices, breach of contract and more for setting up the ranking programs.
All of this was totally predictable. It leads to more dysfunctional relationships among stakeholders in the healthcare system.

The key to the Repair of the Healthcare System is to align incentives by complete price transparency so that no one stakeholder can game the system. It is clear the health insurance industry has positioned itself to game the system for profit with the publication of inaccurate medical claims data at the expense of the patients and physicians.

We must create an environment that promotes mutual trust among all stakeholders. Mechanism designers commonly try to achieve the following basic outcomes: truthfulness, individual rationality, budget balance, and social welfare. The most efficient economic outcomes are systems designed in which everyone does the best for himself under fair and truthful sets of rules. This can be achieved by sharing information truthfully (real price transparency). It is easy to understand that some people can do better than others by not sharing information, distorting information or lying.

If everyone’s incentives are aligned, you have a much better chance for an efficient economic system. I believe the use of raw medical claim data without defining quality medical care properly and not risk weighting medical outcomes will result in misleading judgments. These judgments will hurt patients and physicians. The result will be a decrease in the quality of medical care. It will also lead to more mistrust between the insurance industry, government, consumer groups and physicians.

The only stakeholder who can align the other stakeholders incentives is the consumer, in a consumer driven healthcare system demanding that the government act fairly on setting appropriate rules.