Quality Versus Cost

TMA Concerned Over Economic Profiling of Physicians  

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Medical Economics Feature -- July 2004

By Walt Borges
Associate Editor

Some employers believe that including only the most cost-effective physicians in the networks tapped by their employees will reduce costs. But the Texas Medical Association fears quality health care will be discounted in the rush to lower premiums for employers.

At least four Texas health insurers -- including Aetna Inc. and Blue Cross Blue Shield of Texas (BCBS) -- are offering or planning super-networks based on various methods ofeconomic profiling of physicians. TMA has cautioned health insurers to make sure they measure quality as well as cost in selecting physicians for their networks.         

During TexMed 2004 in May, the TMA House of Delegates approved a resolution that opposes all forms of economic profiling that do not "accurately assess" the quality of health care in addition to costs. The house called on the association to work with health insurers to develop "credible, reliable, and understandable clinical measurements of medical practice."

Physicians attending the convention also questioned BCBS officials about the motive behind the creation of BlueChoice Solutions. The insurer began informing its regular BCBS network members if they were selected for that exclusive network in early May.

Although TMA leaders commend BCBS for improving its responsiveness to physician concerns over the past few years, members of the Council on Socioeconomics and the House Reference Committee on Socioeconomics pulled no punches in expressing displeasure with the insurer.

BCBS told TMA last autumn that it was prompted to create the controversial BlueChoice Solutions network to serve one of its major subscribers, the Employees Retirement System of Texas (ERS). ERS has asked BCBS to reduce medical costs by $100 million a year.

But company officials revealed to the socioeconomics council that ERS has declined to use the super-network as part of the insurance coverage it provides state employees. Instead, BlueChoice Solutions will be offered to private employers, says Dee Whittlesey , MD, BCBS vice president for physician advocacy. The marketplace dictated the health insurer's strategy, she says.

Council Chair Lewis Foxhall , MD, was not pleased.

"What's the market motivation now?" Dr. Foxhall asked Dr. Whittlesey . "To continue to pursue this is inappropriate if there is no pressure to do so."

Dr. Whittlesey did not respond at the council meeting, but said later that there is considerable pressure from private sector employers to try new ideas to reduce costs.

"As health care costs continue to increase, there is mounting pressure upon the marketing teams to find ways to control costs. Although ERS precipitated our immediacy to provide tiered networks, other employers [or subscribers] are looking at such networks to lower health care costs. Tiered networks are a better alternative to give employers than to go across physician networks reducing fees."

Repeated Message

That was not the first time TMA told BCBS that its BlueChoice Solutions network criteria is inadequate.

Earlier this year, then-TMA President Charles W. Bailey Jr., MD, suggested that BCBS allow Robert W. Haley, MD, professor of internal medicine at The University of Texas Southwestern Medical Center at Dallas, to review how BlueChoice Solutions restricted physicians from joining its networks. BCBS agreed, and Dr. Haley met with BCBS staff in February.

Dr. Haley reported that BCBS officials were scientifically astute and willing to listen to suggestions for improving the selection mechanism, which measures physicians against others providing similar treatments in similar situations. He recognized that BCBS was trying to make the selection process transparent by giving physicians detailed information about their economic performance. And he recognized its potential to restore control of the health care system to physicians.

However, Dr. Haley suggested that the insurer is creating a "zero-sum game" by excluding all physicians who score above the mean index for cost efficiency. Every excluded physician who improved enough to join the network later would knock out another doctor. Dr. Haley predicted that the turnover of physicians would undermine network stability and lead to patient dissatisfaction.

The most relevant criticism of the BCBS system is its apparent failure to consider quality of care and patient outcome, Dr. Haley continued. He suggested BCBS screen its network physicians to determine if they meet standards for both care and cost efficiency. He recommended that the software used to identify the claims of a network doctor be used to identify outcomes as well.

Dr. Bailey followed the Haley report with a letter to BCBS, noting that "physicians across the state are expressing surprise, concern, and even anger at the announcement of the BlueChoice Solutions network."

Economic credentialing rarely measures quality, Dr. Bailey wrote, and it encourages underutilization of medical services and undertreatment of patients, risking patient safety. Dr. Bailey asked if BCBS intended to follow up on Dr. Haley's suggestions.

Dr. Whittlesey responded by explaining again the rationale behind BlueChoice Solutions. She pledged to provide more information about the selection criteria and to study many of Dr. Haley's suggestions, but also said quality was a factor in determining the BlueChoice Solutions network.

Other criticisms of BlueChoice Solutions came to light at TexMed 2004. Several physicians complained that selection is based on a small slice of claims filed with BCBS, not on an overview of the claims submitted to all health plans.

One physician listening to the council discussion informed the BCBS delegation that his practice involved about 300 payers, of which BCBS was one of the most important. Yet the company relied on just a few cases in 2002 to determine that he qualifies for the BlueChoice Solutions network, he said.

"How do you know I'm efficient?" the physician asked. 

The BCBS officials agreed that a small number of cases is a problem, but they assured the council they are working on a solution.

For more information on economic profiling, see the August issue of Texas Medicine .

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