Sometime in the not so distant future, the federal government will try to cut Medicare costs by profiling physician resource use and providing feedback to change the way some doctors practice medicine.

For now, the profiling method remains undetermined.

Most recently, a Government Accounting Office report found that per capita profiling, or measuring resource use over a set period of time and connecting that resource use to physicians, could be an effective tool.

The GAO could not put a dollar amount to those savings, said Phyllis Thorburn, assistant director of the agency.

“We went as far as we could with the data we have. We have very strong policies for not going beyond our evidence,” Thorburn said.

Feedback alone has no more than a moderate impact on physicians’ behavior, the GAO report said, but if that feedback came from the Centers for Medicare & Medicaid Services the impact might be greater because of the large share of revenue that Medicare represents.

A survey conducted in 2004-2005 found that, for most physicians, Medicare represented more than one-quarter of practice revenue, and for 17 percent of physicians, the proportion was more than one-half, according to the GAO.

The GAO report is the latest in the ongoing push to get CMS to profile physician resource use in an effort to reduce Medicare costs. MedPac and the Congressional Budget Office have also weighed in on the idea in the last few years.

In its most recent report, the GAO looked at cardiologists, radiologists, internists, and orthopedic surgeons in Miami, Phoenix, Pittsburgh, and Sacramento, Calif., from 2005 to 2006. The report found that the physicians’ practice patterns were relatively stable despite high patient turnover.

In other words, “physicians who showed high resource use in one year tended to stay high in the subsequent year,” the report said.

In addition, patients of high resource physicians used more institutional services, according to the report.

CMS is working to determine the effectiveness of both per capita and episode profiling, or measuring the resources a physician used to treat an episode of care or a specific illness. CMS announced in November that it will seek a contractor to develop software that can measure and compare physician resource use in the Medicare program.

Thorburn said the main difference between the GAO’s recommendation and the CMS approach is the length of the reports.

“They’re sending physicians very lengthy, elaborate reports. We suggest that shorter reports are much more usable,” Thornburn said.

Both the literature and interviews with physicians and associations of specialists showed physicians responded better to shorter reports, she said.

Gil Dupré, chief executive officer of the Louisiana Association of Health Plans, said health insurers have been addressing the differing patterns of practice among different physicians for some time.

Some insurers have tried managing referrals to specialists, Dupré said, but those efforts have been dropped for the most part; it was unpopular with physicians and patients.

Still, even an after-the-fact review of data shared with physicians, letting them know how their patterns of practice match up with those of their peers could be effective, Dupré said. The comparison could provide physicians with some incentives to modify the way they practice, even moreso if physicians are provided with financial incentives so they don’t get paid more just to provide more care.

“They have more incentives to produce good outcomes in the population of patients to which they’re providing care,” Dupré said. “Those things make not only good economic sense but they make good medical sense because they’re tending to enhance medical outcomes as well as doing things more efficiently.”

Profiling physicians and giving them feedback based on the patterns of practice makes sense, Dupré said.

The GAO surveyed five major insurers, all of whom profiled physicians. Most of the insurance company officials questioned whether providing performance feedback would have “a significant impact” on physicians’ behavior without other incentives, the report says.

Officials with four of the five companies said that in order to change the way physicians practiced, the results would have to be made public, or linked to monetary incentives, such as pay-for-performance arrangements, the report said. Publishing the profiles would influence the patients’ choice of doctor.

Officials with one company felt feedback alone would be enough if the reports showed how physicians ranked against their peers and what behavior the physicians needed to change to improve their efficiency, the report said. These officials also said that the impact of feedback could depend on the size of physicians’ practices and whether they have the resources to review the reports and the management structure to affect changes.

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