Evaluating Cost Efficiency of Specialist Physicians

The researchers will analyze alternative strategies for measuring specialist physician cost efficiency. Accurate measures of physician cost efficiency allow consumers to make more informed decisions, while helping health plans make better choices about which physicians to include in their networks. Specifically, the researchers will explore the: (1) feasibility of using multi-plan claims databases for cost efficiency measurement; (2) need for risk adjusting episode expected costs to account for patients' comorbidities; (3) methodology for dealing with cost outlier episodes; (4) methodology for attributing responsibility for individual episodes to individual physicians; (5) minimum episode sample sizes required for cost efficiency measurement; (6) methodology for case-mix standardization; (7) influence and availability of pharmaceutical claims on cost efficiency measurement; and (8) suitability of ratio of observed to expected cost as a cost efficiency metric. The objective of the study is to develop standard methods for measuring the cost efficiency of specialist physicians, providing a broad range of stakeholders with reliable means for developing physician networks, assigning tiers, and implementing better public reporting.