Assigning ambulatory patients and their physicians to hospitals: a method for obtaining population-based provider performance measurements

Health Services Research, Feb, 2007 by Julie P.W. Bynum, Enrique Bernal-Delgado, Daniel Gottlieb, Elliott Fisher

Concern about the uneven quality and rising costs of health care has led to growing interest in the development and adoption of performance measures for health care providers. The underlying theory is that performance measurement can foster improvement not only by helping providers identify opportunities to improve their care, but also by allowing consumers, purchasers, or regulators to select or otherwise reward higher performing providers (Berwick, James, and Coye 2003). Private sector efforts to link provider performance to payment have been underway for several years, and the Centers for Medicare and Medicaid Services has recently initiated several public reporting and pay for performance demonstration projects (Rosenthal et al. 2004).

Current performance measurement initiatives, however, have focused almost entirely upon a narrow set of quality indicators that reflect the provision of specific evidence-based treatments, such as proper testing for diabetics (Rosenthal et al. 2004) or the timely inpatient administration of antibiotics (U.S. Department of Health and Human Services 2005). Much less attention has been devoted to the development of provider-specific population-based measures of rates of surgical procedures or overall health care utilization rates and costs. Such measures, widely used in traditional small-area analysis, have provided powerful insights at the regional and community level into potential overuse of surgical procedures (Harris and Lohr 2002), racial disparities in treatment (Skinner et al. 2003; Baicker et al. 2004), and the health implications of the dramatic differences in spending observed across U.S. regions (Fisher et al. 2003a, b). The major limitation of traditional small area analysis has been the difficulty of precisely defining the provider groups who are responsible for the observed patterns of care, either because multiple physician groups and hospitals are located within a given hospital service area or because a high proportion of patients seek care from providers outside the local market (Roos 1993; Dartmouth Medical School 1998).

Recent efforts to apply the basic concepts of small area analysis to provider specific performance measurement have focused on cohorts of hospitalized patients (Fisher et al. 1994, 2003b, 2004; Wennberg et al. 2004). Limitations of these approaches include concerns about the generalizability of rates of elective surgery measured in seriously ill populations, and about the possibility that with increased outpatient management regional variation in hospitalization rates could introduce bias into performance measures. To address these concerns, we have created Ambulatory Provider Specific Cohorts (APSC) who receive care from specific hospitals and their affiliated medical staff by assigning Medicare enrollees to their predominant ambulatory care physician and, through their physicians, to the hospital where they would likely be admitted, should the need arise.

Conceptually, one may ask why the hospital and its formally or informally affiliated medical staff should be considered as a single unit for performance measurement. We believe there are at least four major reasons to consider the providers at a hospital as at least one among a number of potential levels of the "system" that should be considered for a population-based longitudinal evaluation. First hospital services account for the largest single component of health care spending. Second, any effort to reduce overall hospital use will entail engaging hospitals and their extended medical staffs (EMS) in aligning resource inputs (including hospital and ICU beds) with the size and needs of the specific population they serve. Third, marked geographic variations in rates of surgery have called into question the quality of decision making for many major procedures; population-based rates can be used to compare and monitor utilization across specific providers (Weinstein et al. 2004). Finally, efforts to address the current well-recognized deficiencies in the quality and efficiency of care will need to ensure that physicians are able to take advantage of advances in informatics, quality improvement, and care coordination that may be beyond the reach of most physicians because they are in individual or small group practices. The hospital could play an important role by facilitating the "virtual" integration of its affiliated staff through shared electronic records and care protocols.

In this paper, we describe the assignment method and present findings that support the validity of the enrollee and physician assignments and test the hypothesis that estimates of risk-adjusted costs across provider groups in one year will be highly predictive of costs in subsequent years.

METHODS

Cohort Development

Data Source. The data sources for the current study were Medicare enrollment and claims data for 1998-2000, the Medicare Physician Identification and Eligibility Registry (MPIER) file, and the American Hospital Association Annual Survey. We used 100 percent MedPAR, Inpatient and Outpatient files, and a 20 percent random sample (based upon enrollees) of the Carrier File. Appendix A describes the files and how they were used in this study.