The CMS should develop a system that identifies individual physicians with inefficient practice patterns, and use the information to improve the efficiency of the Medicare program, according to a Government Accountability Office report.
Such a profiling system may include financial or other incentives for physicians to improve the efficiency of the care they provide. In analyzing 2003 Medicare claims data, the GAO found outlier generalist physicians, those who treat a disproportionate share of overly expensive patients, in all 12 metropolitan areas studied. Although these outlier physicians saw similar numbers of Medicare patients, the GAO found that their patients were more likely to have been hospitalized multiple times, more likely to have used home health services and less likely to have been admitted to a skilled-nursing facility. The CMS already has a comprehensive repository of Medicare claims data to compute reliable efficiency measures for most Medicare physicians, the report stated. Implementing other strategies to encourage efficiency would likely require legislation. However, the CMS may not currently have the flexibility that other purchasers have to link physician profiling results to a range of incentives encouraging efficiency, the GAO concludes. The agency agrees with most of the recommendations.