No Physician Left Behind

The announcement earlier this month that physician groups were joining forces with major insurers to establish a national set of standards to measure physician performance was a big first step in resolving the dispute over the accuracy of physician ranking systems. But standards-based reform has drawn criticism in the education sector, and reformers should expect to see critiques similar to those leveled against No Child Left Behind, the law that established national testing standards for rewarding and ranking public schools.

We may be talking about two different industries, but bear with me on the analogy—the dialogue is very similar. After all, physicians are regularly getting report cards and being graded on their performance—sometimes with the same letter grades used in schools—and reform efforts are based on providing incentives based on a national standardized benchmark.

Now consider the two major criticisms that have been made against the No Child Left Behind approach: That national standards don’t accurately measure local variations in resources, student populations, and staffing challenges, and that focusing on standards can actually reduce the quality of education by providing incentives for schools to “teach to the test” in order to boost rankings.

Similar criticisms can and probably will be made about national ranking standards applied to physicians. It will certainly be difficult to reach a consensus on a national set of standards that takes into account variations in resources, patient populations, payer mix, costs, and other externalities that aren’t directly related to a physician’s skill but may affect his or her final ranking. And perverse incentives are always a concern in healthcare. Will physicians be too focused on improving their rankings, so much so that it comes at the expense of patient care and quality?

Not that the alternative is any better—the lack of uniform standards is making physician rankings one of the most contentious issues between insurers and doctors, and that’s saying a lot. Physician groups have even taken the issue to court, arguing that insurer ratings mislead consumers and are based more on cost than quality.

Without some standardization, physicians receive mixed signals about their performance and may take an unjust financial hit. A recent Newsweek article offered the example of a physician treating patients from different health plans. “If a physician has 100 patients, but only 15 of them are on a given plan, then only those 15 patients will contribute to that plan's rating of that doctor. The result: a physician can end up with drastically different rankings from one plan to the next.” Add in factors about sample size (How much information do you need to gauge physician performance?) and insurers’ incentives to focus on costs rather than quality, and it’s no wonder docs don’t trust the ratings system.

But the concept is here to stay. Though some physicians might debate the need for rankings in the first place, insurers have latched onto the idea and independent physician-rating Web sites, which typically lack accountability and accuracy, are popping up regularly. Patients are going to rank and research their doctors, most likely online, so it’s time to move onto the question of how to do this most effectively.

Establishing a national set of standards is movement in the right direction, but it’s important to keep in mind the shortcomings of national standardization systems and keep the process as transparent as possible.