Improving Value

Provider Peer Comparisons

Like many highly skilled professionals, physicians take pride in their expertise and appreciate positive feedback. Peer comparisons—reports that show how an individual provider performs compared to peers (whose names may be blinded)—are a method of changing practice patterns and reining in practice outliers that leverages physicians’ interest in excelling.

Internal Peer Comparisons

Arguably, the majority of physicians desire the respect and admiration of their colleagues and generally strive to perform at or above the level of their peers. By making a physician’s performance data internally transparent, healthcare organizations aim to change the behavior of “outliers” to more closely align with standards of care.

A strong body of literature supports the notion that peer comparison is an effective strategy to incentivize behavioral change, although the effectiveness varies depending on the manner in which the “peer pressure” is applied. For example, research reveals that aggressive comparisons (in which there is a greater perceived risk of reputational harm) are more effective than passive strategies at incentivizing change.¹ Passive strategies shy away from “shaming” clinicians by making their data internally available, but omitting personal identifiers or declining to rank order the data.² These methods hold poor performers less personally accountable than more aggressive approaches.

Finally, peer comparisons using utilization data are more effective when provided with normative benchmarks (i.e., information on the appropriate amount of care to provide.³ In fact, failure to provide normative benchmarks may have the opposite of the intended effect. For example, ambiguity over what constitutes desirable behavior could cause low-utilizing physicians to increase their use of unnecessary services in an effort to conform to the practices of their high-utilizing peers.⁴

External Peer Comparisons (a.k.a Public Reporting)

Public reporting similarly holds providers accountable for quality and costs by making performance indicators available to external audiences, such as consumers, employers, insurers and other providers. The underlying strategy is to incentivize physicians to deliver better value in an effort to “protect their reputations and the demand for their services.”⁵

Cost Reporting: Public reporting of costs (also known as price transparency) has successfully incentivized some providers to reduce their prices. A 2014 Health Affairs study analyzing the impact of price transparency on patients’ selection of high-value MRI providers observed that approximately 30 providers lowered their prices in order to remain competitive after being publicly compared to their peers.⁶

Cost reporting in reference pricing—in which consumers must pay more out-of-pocket to go to providers whose charges exceed a certain benchmark—has also incentivized high-cost providers to lower their prices to remain competitive.⁷ In a now famous example where CalPERS established reference prices for hip and knee replacements, the savings from high-cost providers lowering their prices exceed the savings from consumers “voting with their feet.”⁸ It is important to note, however, that the same price transparency may also incentivize some low-cost providers to increase their prices to meet the established rate.⁹

Quality Reporting: Case studies suggest that, under the right circumstances, public reporting of quality metrics can also provide a meaningful impetus for change. In the early 2000s, an employer-purchasing cooperative based in Madison, Wisconsin released a report containing performance results for local hospitals using information from a statewide database. Studies showed that, compared to Wisconsin hospitals not subject to public reporting, Madison-area hospitals participated in more quality improvement initiatives and “improved more over time.”^10,11

At University of Utah Health Care, posting patient experience data and comments online led to a significant increase in patients’ satisfaction with their physician. Before the initiative, only one percent of the health system’s physicians ranked in the top one percent for patient satisfaction nationally. After the intervention, the proportion of physicians ranking in the first percentile increased to over 25 percent.^12,13

Despite anecdotal evidence of effectiveness, determining the impact of public reporting on quality is difficult. Reasons include:¹⁴

• Few, if any, randomized controlled trials on public reporting of healthcare information have been conducted.
• Conclusions from studies comparing provider performance before and after public reporting are weakened by delays between the times performance indicators are announced and when reporting begins. This lag time allows providers to jumpstart improvement activities before baseline performance is actually measured, biasing results.
• Public reporting initiatives are often implemented in combination with other improvement activities (like financial incentive programs), making it difficult for researchers to determine the effectiveness of the standalone intervention.

Limitations:

The impact of public reporting may be severely limited depending on the environment in which it is applied. For example, public reporting is largely ineffective when applied to non-shoppable services (such as emergency care) for which consumers do not have the time nor the resources necessary to make an informed decision. Additionally, if the perception is that few consumers use the information to shop for services (even when it is available), the impact on providers’ behavior may be diminished.

Unintended Consequences:

Public reporting has been associated with a number of unintended consequences. Perhaps most notably, critics argue that publicly reporting quality metrics like mortality rates unfairly penalizes providers that take on sicker patients and/or perform high-risk interventions.¹⁵ Inadvertently incentivizing physicians to solely focus on providing high quality care in areas that are publicly reported (at the risk of neglecting other aspects of care) and encouraging them to “treat to the measure” are also causes for concern.^16,17

When To Use Peer Comparisons

In light of mixed evidence with respect to provider payment reform and complexity of administering such systems, payers and policymakers should consider peer comparisons as a possible first step, especially when there is strong evidence to guide practice decisions. Moreover, non-financial incentives, like peer comparisons, should be aligned with any financial incentives facing providers or patients—mixed messages should be avoided!

 

Notes

 1. Song, Hummy, et al., "Closing the Productivity Gap: Improving Worker Productivity though Public Relative Performance Feedback and Validation of Best Practices," Management Science (December 24, 2016). 

2. Lee, Thomas H., "Financial versus Non-Financial Incentives for Improving Patient Experience," Journal of Patient Experience, Vol. 2, No. 1 (May 2015) 

3. Liao, Joshua M., Lee A. Fleisher, and Amol S. Navathe, "Increasing the Value of Social Comparisons of Physician Performance Using Norms," JAMA, Vol. 316, No. 11 (September 20, 2016). 

4. Ibid.

5. James, Julia, "Public Reporting on Quality and Costs," Health Affairs Policy Brief (March 8, 2012). 

6. Wu, Sze-jung, et al., "Price Transparency for MRIs Increased Use of Less Costly Providers and Triggered Provider Competition," Health Affairs, Vol. 33, No. 8 (August 2014).

7. Boynton, Ann, and James C. Robinson, "Appropriate Use of Reference Pricing Can Increase Value," Health Affairs Blog (July 7, 2015). 

8. Robinson, James, and Timothy Brown, "Evaluation of Reference Pricing: Final Report, letter to David Cowling of CalPERS," (May 15, 2013). 

9. Robinson, James C., and Timothy T. Brown, "Increases in Consumer Cost Sharing Redirect Patient Volumes and Reduce Hospital Prices for Orthopedic Surgery," Health Affairs, Vol. 32, No. 8 (August 2013). 

10. Roland, Martin, and R. Adams Dudley, "How Financial and Reputation Incentives Can be Used to Improve Medical Care," Health Services Research, Vol. 50, No. 2 (December 2015). 

11. Hibbard, Judith H., Jean Stockard and Martin Tusler, "Does Publicizing Hospital Performance Stimulate Quality Improvement Efforts?" Health Affairs, Vol. 22, No. 2 (March/April 2003). 

12. Lee (May 2015). 

13. Lee, Thomas H., and Toby Cosgrove, "Engaging Doctors in the Health Care Revolution," Harvard Business Review (June 2014). 

14. Roland, Martin, and R. Adams Dudley, "How Financial and Reputational Incentives Can be Used to Improve Medical Care," Health Services Research, Vol. 50, No. 2 (December 2015). 

15. Narins, Craig R., Ann M. Dozier, and Frederick S. Ling, "The Influence of Public Reporting of Outcome Data on Medical Decision Making by Physicians," JAMA, Vol. 165, No. 1 (January 10, 2005). 

16. Roland and Dudley (December 2015). 

17. Maxwell, Bryan G., et al., "Temporal Changes in Survival after Cardiac Surgery are Associated with the Thirty-Day Mortality Benchmark," Health Services Research, Vol. 49, No. 5 (October 2014). 

More on this Topic

• Center for Medicare and Medicaid Services: Physician Compare Initiative
• Management Science: Closing the Productivity Gap: Improving Worker Productivity through Public Relative Performance Feedback and Validation of Best Practices (Dec. 2016) 
• JAMA: Increasing the Value of Social Comparisons of Physician Performance Using Norms (Sept. 2016)
• JAMA: Effect of Behavioral Interventions on Inappropriate Antibiotic Prescribing Among Primary Care Practices: A Randomized Clinical Trial (Feb. 2016)
• Health Services Research: How Financial and Reputational Incentives Can be Used to Improve Medical Care (Dec. 2015)
• Journal of Patient Experience: Financial versus Non-Financial Incentives for Improving Patient Experience (May 2015)