The Trouble with Benchmarks

CMS is moving towards a system whereby physicians will be at least partially paid based upon certain quality of care measures. Now, we can argue about the specifics, but the principle is reasonable and is a means of trying to compensate “better” physicians with additional pay – a reward. The demonstration project, offering a 1.5% bonus that begins July 1, is the first major step in that direction.

In testimony last month before Congress, A. Bruce Steinwald, Director, Health Care for the Government Accountability Office (GAO) said that there are variations in how efficiently physicians practice medicine and that CMS has the ability to evaluate physician practices. As an example, Steinwald said, CMS could provide report to physicians comparing their practice’s efficiency with that of their peers. Steinwald was testifying before the Subcommittee on Health of the House Ways and Means Committee

The report found that outlier physicians saw a similar Medicare caseload and patients/beneficiaries had the same average number of physician visits. 
 
GAO’s analysis found outlier generalist physicians—physicians who treat a disproportionate share of overly expensive patients—in all 12 metropolitan 
areas studied. Outlier generalists and other generalists saw similar average numbers of Medicare patients (219 compared with 235) and their patients 
averaged the same number of office visits (3.7 compared with 3.5). However, after taking into account beneficiary health status and geographic location, 
we found that beneficiaries who saw an outlier generalist, compared with those who saw other generalists, were 15 percent more likely to have been 
hospitalized, 57 percent more likely to have been hospitalized multiple times, and 51 percent more likely to have used home health services. By contrast, 
they were 10 percent less likely to have been admitted to a skilled nursing facility. 
 
Benchmarks, of course, drive to the average, not necessarily to the best. The multiple hospitalizations raise a question, of course, and I would be interested 
in prescription drug use. More home care may partially offset skilled nursing facility use. The hospital use, however, does devour dollars, so the questions are 
obvious. The practice variations by geography were intriguing: Miami had about 20 of physicians were in outlier groups, but Pittsburgh, with a large elderly 
population and a very aggressive hospital conglomerate that dominates the market, only 3.8% of physicians were outliers. Why is that? The similar question 
has come up before in the Dartmouth Project that looked at Medicare utilization around the country – the northeast having much higher utilization than many 
other urban areas, and  the low utilization areas did not have increased morbidity or mortality. When we are spending almost $2 trillion annually on healthcare 
in this country, these are reasonable questions, and there isn’t a good answer.
 
We’re going to keep coming back to better information as the solution. EHR, by themselves, are not magic. The real challenge is going to be learning how to 
use all of this data, and the power of computing, to create information that is useful in clinical decision making.
 
As for benchmarks – look at joining the Medicare demonstration project, and start looking at your own work. You want to be positioned front and center in 
understanding quality of care and other benchmarking initiatives to better position yourself for future contracts and incentive pay.