The Challenge Of Measuring Surgeon Spending For Payment Policies

Objective: Our objective was to understand the reliability of profiling surgeons on average health care spending.Summary of Background Data: Under its Merit-based Incentive Payment System (MIPS), Medicare will measure surgeon spending and tie performance to payments. Although the intent of this cost-profiling is to reward low-cost surgeons, it is unknown whether surgeons can be accurately distinguished from their peers.Methods: We used Michigan Medicare and commercial payer claims data to construct episodes of surgical care and to calculate average annual spending for individual surgeons. We then estimated the "reliability" (ie, the ability to distinguish surgeons from their peers) of these cost-profiles and the case-volume that surgeons would need in order to achieve high reliability [intraclass correlation coefficient (ICC) >0.8]. Finally, we calculated the reliability of 2 alternative methods of profiling surgeons (ie, using multiple years of data and grouping surgeons by hospitals).Results: We found that annual cost-profiles of individual surgeons had poor reliability; the ICC ranged from <0.001 for CABG to 0.061 for cholecystectomy. We found that few surgeons in the state of Michigan have sufficient case-volume to be reliably compared; 1% had the minimum yearly case. Finally, we found that the reliability of the cost-profiles can be improved by measuring spending at the hospital-level and/or by incorporating additional years of data.Conclusion: These findings suggest that the Medicare program should measure surgeon spending at a group level or incorporate multiple years of data to reduce misclassification of surgeon performance in the MIPS program.