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Washington state health plan starts tiered network for physicians

Premera Blue Cross says it groups doctors based on "cost efficiency." Some physicians like the idea, but others are skeptical.

By Robert Kazel, amednews staff. March 24/31, 2003.

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Health plans' tiering of networks based on cost is moving beyond hospitals and into physician practices.

Premera Blue Cross in Washington state is rolling out a managed care network that uses cost measurements to assign physicians to tiers, deciding where to place large physician groups according to how well they score on cost efficiency. The doctors considered most efficient are in the lower-cost tier. Measurements are adjusted for case mix and severity to prevent groups with many patients with more costly cases from being penalized.

But Jeffrey Collins, MD, an internist and president-elect of the Washington State Medical Assn., said a tiered approach using cost data alone seemed "hazardous." He is not convinced that the network can truly take severity into account, nor does profiling for tiering make sense without quality outcomes measurement.

"I know the health plan thinks it can figure it out with a data system," he said. "But if you have someone who is really ill, there may be no relationship between the cost of the care and the quality of the care."

The plan, called Dimensions, is profiling costs at large clinics across the state, representing about 15% of all physicians in the Premera system. So far, the company said, about 160,000 patients are in Dimensions, out of the company's total patient base of 1.2 million in Washington. Large physician groups are being cost-profiled as a whole, rather than looking at individual doctors.

Clinics that do not want to be a part of the Dimensions network can still be part of the Premera PPO. Depending on their coverage, some patients can see doctors only in Dimensions, and others can choose among the other tiers by paying higher co-pays.