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N.Y. officials fight plan to rank docs

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Employers are defending the efforts of health insurers to rank health care providers on cost and quality despite concerns from government officials and providers that the programs may drive consumers to choose doctors based on price or faulty data.

The controversy results from the New York attorney general's office threat to go to court to stop a UnitedHealth Group Inc. unit from implementing later this month a program to rank doctors in New York.

Employers, however, say that the action by the officials is unlikely to deter the growth of the ranking programs as they are a critical part of consumerism and efforts to improve the health care system.

Minnetonka, Minn.-based UnitedHealth said it would delay the implementation of the program to use cost and quality metrics to rank doctors in New York, New Jersey and Connecticut until the fourth quarter of 2007 to give physicians more time to become familiar with the program. A UnitedHealth spokesman said the insurer made the decision before it received a letter from New York Attorney General Andrew Cuomo.

The "Premium Designation" program analyzes physician and hospital practices against established clinical guidelines for quality care and is designed to raise consumer awareness of differences among health care practices that can affect both the effectiveness and cost of care and treatment, the insurer says.

The New York Attorney General's office, though, said consumers may be steered to doctors based on "faulty data and criteria" and may be encouraged to choose doctors based on price rather than quality. In addition, the insurer's profit motive may affect the accuracy of its quality rankings because high-quality doctors may be more expensive, the officials say.

The alarms raised by New York officials are legitimate and are considerations anytime an insurer is the organization issuing the data, said Regina Herzlinger, a professor of business administration at the Harvard Business School in Boston. "Not to say UnitedHealth is evil or doesn't have the consumer's interest at heart, but the insurer is clearly conflicted," she said.

The American Medical Assn. said the UnitedHealth program and similar programs do not meet its criteria for "fair and equitable programs," which is why the Chicago-based organization has brought them to the attention of insurance commissioners and the New York Attorney General's office, said Dr. James Rohack, a Temple, Texas-based trustee of the AMA. "The problem is that these programs don't link to outcomes and don't link to the unique needs of patients," he said.

Employers, though, defended UnitedHealth, saying that the programs are necessary to improve the quality of care provided to employees and to restrain health care cost increases.

"The New York Attorney General's office would hurt the public's ability to choose quality health care at a reasonable cost by eliminating UnitedHealthcare's ability to publish quality and cost information," said Jean Radtke, president of Phoenix Marketing Group Inc. in Milwaukee and a UnitedHealth employer client. "I think they're doing a very good job and I applaud them for initiating a transparency initiative. Transparency is extremely important to those choosing health care services."

While employer organizations such as the New York Business Group on Health are developing their own provider performance metrics, health insurers are further along in these efforts, said Laurel Pickering, executive director of the NYBGH. "I think employers think it's fine for insurers to be doing this and employers are driving them to measure the performance of their networks," she said.

Eventually, an independent, third-party organization should be created to gather and disseminate this type of information, Ms. Pickering said.

"United and other health plans are stepping into what has been a measurement free-zone," said Peter Lee, president of the San Francisco-based Pacific Business Group on Health. "These programs are in many ways essential to creating a health care system that actually works over the long term."

Such programs increase transparency, which helps consumers, employers say.

"Transparency is uncomfortable and having performance looked at is uncomfortable, but this is what we have to do," said Helen Darling, president of the Washington-based National Business Group on Health. "We can't keep throwing more money at poor performers. We have to differentiate between those who are doing well and those who are not doing well."

Providers say they are not fundamentally opposed to doctor ranking initiatives, but that they must be done correctly and there are many problems with the current programs.

The California Assn. of Physician Groups supports transparency, particularly on the physician group level, said Donald Crane, president and chief executive officer for the Los Angeles-based organization. Transparency on the individual physician level, though, is problematic because it is difficult to attain adequate data on individual doctors and difficult to attribute health outcomes to any one physician, he said. The rating programs also often fail to take into account individual risk factors within the physician's patient group that would adversely affect health outcomes, Mr. Crane said.

"You want to carefully develop these (programs), carefully test them and only when they pass muster should they be implemented," he said.

In addition, the metrics are often developed without adequate consultation with the providers whose performance will be graded. Employers acknowledge that consultation is important.

Health care purchasers have to take doctors and hospitals through the data and show them exactly how the metrics are calculated and give them the opportunity to audit the programs because providers must feel confident that the metrics are fair, current and transparent, Ms. Darling said.

The AMA has specific principles that organizations developing physician profiles should adhere to, including the active involvement of providers in the development of the programs (see box, page 23). "We would hope that the insurance industry would realize that the AMA will be taking aggressive action anytime programs are created that don't meet the principles," Dr. Rohack said.

Despite the concerns, transparency initiatives relating to provider performance are here to stay, employers say. "There's too much at stake not to move on these issues," Ms. Darling said.