Physician Performance Measurement & Reporting Introduction
Physician Performance Measurement and Reporting is a value-based purchasing strategy that enables health care stakeholders to evaluate physician compliance with clinical, evidence-based care guidelines, which can lead to lower costs and improved outcomes, and informed consumers who seek care from physicians who follow these guidelines. This strategy can be utilized by a variety of stakeholders—physicians, health plans, employers, patients, and others—to improve care, monitor outcomes, and align incentives. As such, physician measurement is an end unto itself, but also a foundation for other value-based purchasing strategies that seek to reward high performing physicians.
Measurement and reporting initiatives can help to evaluate and compare the quality and efficiency of care delivered to patients, and recent studies show that improved quality care results in better patient outcomes. The goals of performance reporting are illustrated in Figure 1. Currently, there is wide variation in physician performance. Some physicians deliver high quality care, but are inefficient (quadrant 2) or vice versa (quadrant 3). Some physicians perform poorly on both quality and efficiency (quadrant 1), and some do well on both axes (quadrant 4). The goal of performance measurement is to understand where physicians are in terms of their performance, and then support programs that drive improvements in both quality and efficiency so that all physicians move toward quadrant 4.
Improved outcomes that result from performance measurement and improvement can have a direct financial impact for health care purchasers and payers with reduced costs due to avoiding duplicative or unnecessary health services. Overuse, underuse, and misuse of health care services continue to occur in the U.S. health care system. In 2007, “U.S. patients were much more likely—three to four times the benchmark rate—than patients in other countries to report having had duplicate tests or that medical records or test results were not available at the time of their appointment.” Some of these issues inevitably carry over into the hospital setting. The average rate of hospital re-admissions within 30 days was 18% in 2007, many of which are considered avoidable.
Measurement and reporting initiatives also can help decrease performance variation by standardizing measures, which contributes to benchmarking levels for performance evaluation and comparisons. Studies show that significant variation exists in the quality and cost of health care services across the United States— “among Medicare patients treated for heart attacks, hip fractures, or colon cancer, a high proportion of regions with the lowest mortality rates also had lower total costs, indicating that it is possible to save lives and lower costs through more effective, efficient systems.” Decreasing variation through quality measurement and improvement programs will encourage efficiency throughout the health care system.
All health care stakeholders are concerned about quality and costs as factors of the health care delivery system, and the goal of physician measurement and reporting programs is two-fold: to improve patient care and reduce unnecessary costs. Physicians and health plans can use performance information for comparative benchmarking and quality improvement purposes. Employers can use performance information to educate consumers about the quality and efficiency of care delivered by local providers. Consumers can use performance information for physician selection and health management efforts. In addition to enhancing transparency and consumerism, the strategy of physician measurement and reporting helps set performance standards on a local, regional, and/or national level.
Stakeholders have varying perspectives on physician measurement and reporting initiatives. Most purchasers and health plans tend to support this strategy as a component to improve the health care system through standardization. However, many physicians remain skeptical about the validity of performance measurement data and the credibility and accuracy of public reporting, especially regarding outcome measures. A recent interview study concluded that most physicians are comfortable with performance measurement for incentives and rewards, but they remain skeptical about public reporting initiatives due to the questioned accuracy of the data.
Health plans, on the other hand, typically support physician performance measurement and reporting, and many health plans have developed quality improvement programs that include these reporting requirements. Some health plans, such as Aetna and United Healthcare, have developed separate or "tiered" physician networks based on quality and efficiency performance data. Health plans use information, education, and benefit design to encourage consumers to seek care from these high-performing providers.
Other organizations, such as the Consumer-Purchaser Disclosure Project are involved in performance measurement and reporting activities through the dissemination of this information to consumers. The Consumer-Purchaser Disclosure Project follows the care measures endorsed by the National Quality Forum (NQF), a nationally-recognized health care measures clearinghouse used by numerous health care organizations in quality improvement programs and initiatives.
As a value-based purchasing strategy implemented by health care payers and purchasers, physician performance measurement and reporting complements the four pillars of value-based purchasing:
- Standardizing measurement and collecting data on performance. Performance measurement is typically based on nationally approved quality and efficiency measures developed by organizations such as the American Medical Association or the National Committee for Quality Assurance (NCQA) and endorsed by NQF. Although specific measures may vary by initiative, most initiatives evaluate claims data to determine adherence to the measure set. In general, the goal is to select measures that are technically valid and meaningful to a range of stakeholders. The NQF endorsement process includes multi-stakeholder review.
- Reporting the results of measurement efforts publicly. Results of physician performance are typically reported by health plans to employers and consumers through websites, report cards, member resources, and targeted mailings. Consumers are encouraged to use the quality and efficiency performance information from public reporting initiatives like Aligning Forces for Quality to make informed health care decisions.
- Reforming the payment system. Physician performance measurement serves as the foundation for incentives and rewards programs and value-based purchasing strategies, such as pay-for-performance. Physicians receive financial and non-financial rewards based on performance achievements established by the program. The linkage of performance and reimbursement represents a new platform for an improved, reformed health system.
- Fostering informed choice for consumers. Performance information, including quality data and cost information, is often reported to consumers as a result of a focus on health care transparency and consumerism. Consumers can access data online through various provider performance resources, such as HealthGrades, in addition to health plans’ websites. Studies support reporting performance information to consumers to help encourage informed health care decision-making.
 Lansky, David. “Improving Quality Through Public Disclosure of Performance Information.” Health Affairs. July/August 2002; 21(4): 52-62. http://content.healthaffairs.org/cgi/content/full/21/4/52.