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Q&A: Are there any independent methods to judge a physician's efficiency?

Hospitalist Leadership Connection, March 28, 2007

A: On March 6, 2007, the director of healthcare for the Government Accountability Office (GAO) released a report (GAO-07-567T) that stated "physician profiling programs may have the potential to generate savings for healthcare purchasers."

The GAO selected 10 healthcare purchasers to review because these purchasers--five commercial health plans, a provider network, a trust fund, two U.S. states and one Canadian province--examine physician practices based on efficiency. The GAO focused its analysis on general practice, internal medicine, and family practice physicians. While efficiency can have many meanings, the GAO defined efficiency as "providing and ordering a level of services that is sufficient to meet patients' healthcare needs but not excessive, given a patient's health status."

The researchers used two approaches to identify physicians whose medical practices were inefficient. First, purchasers focused on the costs associated with treating a specific episode of illness. Second, purchasers focused on costs, within a specific period of time, associated with the patients in the practice. 

The GAO report noted that the Centers for Medicare & Medicaid Services (CMS) has the tools to identify physicians who are likely to practice medicine in an inefficient manner. As federal and state healthcare expenditures continue to grow and private employers pressure third-party payers to control the annual premium increases, it is likely that additional governmental and non-governmental groups will publish reports assessing the efficiencies and inefficiencies in the health care delivery system.

Bruce Armon, Esq., a partner in the Philadelphia office of the law firm Saul Ewing, LLP, fielded this question. Armon specializes in healthcare law and can be contacted directly at barmon@saul.com.

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