MedPAC starts testing doctor efficiency

The AMA says efficiency measures must be appropriately risk-adjusted before sharing results with physicians becomes useful.

By David Glendinning, AMNews staff. July 17, 2006.

Washington -- The panel that advises Congress on Medicare has taken the first steps toward comparing physicians based on how many program resources they use, with the hope that officials some day can identify more-efficient and less-efficient doctors.

In its June report, the Medicare Payment Advisory Commission analyzed 5% of Medicare claims in 13 major metropolitan areas to see how much the program spent on physician services and other medical care for certain types of conditions. MedPAC used commercially available software to organize results into groups based on each episode of care, or single full course of treatment.

Analysis of the numbers determined that the average cost to Medicare of a single episode of care varied widely, depending on region. For instance, an episode for a patient with type 1 diabetes cost Medicare an average of $600 in Minneapolis but $1,175 in New York. The national average is $833.

Not all of this money is due to physician services. The tabulation for one episode of care includes inpatient services, imaging and other tests, and post-acute care plus physician exams and procedures.

But MedPAC hopes that Medicare officials someday may use these types of total dollar figures to determine how many resources can be linked to the one physician who is most responsible for directing or coordinating the care for the patient. The panel recommended more than a year ago that the Centers for Medicare & Medicaid Services devise a system under which the agency collects episode-of-care information and confidentially shares the results with individual physicians. If some doctors after receiving these reports find that they are ordering many more services and complex procedures than their peers, they may be convinced to be more efficient in the provision of care, MedPAC said.