Profiles of Doctors 2/97
by Del Meyer, MD
Profiles are certainly a hot topic recently. But do they measure our efficiency in arriving at a diagnosis and providing treatment?
Some of our doctors from Europe and Canada have mentioned that they were profiled as to costs in their native land. They felt fortunate to have escaped from their former medical systems believing that they would find the freedom to practice here as they were trained. In managed care meetings, I have observed that the astonishment of these physicians sometimes turns to rage as they see profiles beside their names.
Some time ago when my managed care profile reached 125%, I became alarmed. I called the medical director of my managed care organization (not the same one I have at present) and he made a visit to my office to "explain it all to me."
I was told that my cost was 25% above the average on a per member per month (PMPM) basis. He estimated that approximately one-third of the members that had signed up with me came in during the course of the year. My total cost to the HMO was distributed over the entire number on my list even though it was incurred caring for the one-third that actually sought medical attention. When I asked, "Why not just average my cost to those that I treat and take all the guess work out of it?" I was assured that it "all balanced out." I pointed out that my patients, by and large, had cardiopulmonary disease, were sicker, and required more care than the average patient. Furthermore, I indicated that I was very cost conscious, did not refer out my pulmonary patients, and used generic medications.
The doctor assured me that all these things were factored into the formula they used to calculate profiles so I could be compared to my colleagues. He advised me that unless I reduced my costs, when my total patients enrolled in the system reached 100, (the magic number when the averages were considered statistically valid), I would experience a 10% reduction in reimbursement, and be given 3 months to reduce my profile to 100. If my profile was still 25% above normal after three months, my reimbursement would be decreased by another 10% and I would be given an additional three months to correct my practice. He suggested that I could easily accomplish that by ordering fewer consults, fewer diagnostic tests, and less expensive medications.
"And if Im still at 125% of normal?" I asked. "We will reduce your income another 10%. And doctor, we can just keep on going until you learn."
I could not believe what I was hearing from a former colleague of mine, also a sub-specialist, who had referred to me and I to him for over a decade. He seemed to enjoy his position of power.
I am no longer a member of that MCO and that medical director has left town. I am now with a group whose leader, I believe, understands medical costs and that doctors, and not insurance carriers, must remain in charge. However, I still face a high "profile." I am told many of the same things, albeit on much friendlier terms. My suggestion that costs be allocated to patients has gone unheeded.
Since we as doctors can only control the costs of the patients we treat, why not measure those costs directly? The average profile for our Sacramento area is about $45 PMPM. Im at approximately 120%. If we, in fact, do see one-third of the "members" that sign up with us, why dont we just say that the cost per "patient" per month (PPPM) profile is $135 (3 x $45) in the Sacramento area? This would truly reveal which doctors are most cost effective.
There is definite "selection" of patients occurring among providers. Doctors have told me that they advise HMO patients who are sick with certain diagnosis to sign up with someone else who is "more competent to handle such cases." Although this is not supposed to distort the ratio of sick to total patients in anyones practice, it probably does decrease their sick to total patients from one-third to something considerably less. On the other hand I welcome the sickest pulmonary patients into my practice. Some patients have told me they cross reference their HMO lists with the yellow page listing to find me. National data indicates that pulmonologist and certain specialist practicing primary care frequently are the most cost effective practitioners. However, I was sure that this increased my sick to total patients above one-third. Since we now get printouts, I was able to research this.
I compared a printout of all the patients from the MCO Ive seen with the list of patients assigned to me. I was not really surprised to discover that I am actually seeing 70% of the total patients assigned to me--twice as many as the average provider.
That means if my profile of 120% of the average PMPM is applied to 70% of those enrolled rather than the estimated 35%, then my PPPM profile is actually only 60% of the average (half of 120%) of my peers locally. That makes me one of the more cost-efficient doctors.
It is important that doctors efficiency be based on a relevant number--on patients actually seen. The Per Member Per Month may be fine for premium calculations, but for reimbursements it should be replaced with a Per Patient Per Month Profile. Otherwise in the next "purge" of high profile doctors, MCOs will actually discard the most efficient doctors. That would be a double tragedy: the tragedy of snuffing out the professional lives of cost-effective doctors compounded by the retention of doctors who will cost up to 400% more when they pick up the patients that the deselected doctors lose--a poor solution to either the local or the national health care cost problem.