Physician Cost Profiling

Question 1

Physician Cost Profiling

Process

Answer 1

1. Group claims into meaningful episodes
2. Determine episode costs
3. Assign episode to physician with highest proportion of cost
4. Construct Physician Summary Cost Profiles
   
   1. Observed Costs / Expected Costs

Question 2

Physician Cost Profiling

How are performance measures evaluated? (List, Define)

Answer 2

• Validity = how well measure represents phenomenon of interest
• Reliability = variability in measure that is due to real differences in performance

Question 3

Physician Cost Profiling

Factors Determining Reliability of Cost Profiles

Answer 3

• # of obs
• Variation among physicians in use of resources
• Random variation in scores

Question 4

Physician Cost Profiling

Analysis of Misclassification

Answer 4

• Misclassification = Probability that random physician is inaccurately categorized
• Overall Misclassification Rate = % of physicians incorrectly “Lower Cost” + % of physicians incorrectly “Not Lower Cost”

Question 5

Physician Cost Profiling

Increasing Reliability of Cost Profiles

Answer 5

• Increases in sample size = not adequate
• Change episode mix = difficult
• Develop better measures of cost performance at physician level

Question 6

Physician Cost Profiling

Analysis of Reliability

Answer 6

• 0 = all variation is due to measurement error
• 1 = all variation is due to real differences in performance