In 1998 Blue Cross Blue Shield of Kansas (BCBSKS) embarked on a physician profiling program embodying a directive from our vision statement: "Any information provided needs to be based on sound clinical methodology and presented in a manner both easy to understand and use." Our goal was to empower our 3,500-member network with information to improve medical care, knowing that cost savings would follow.
Over the years, we've refined and augmented the program to ensure that this important yet delicate information is shared so physicians can hear and act on it. We're saving an estimated $5.8 million annually with our approach.
From data to information
BCBSKS had been analyzing the practice patterns of its physicians for a number of years before this program was initiated. However, physicians didn't find the statistical data medically meaningful or useful, and the overall profiling process was alienating.
We believed that physicians would respond favorably if we could clearly communicate a clinically based, accurate comparison of their practice patterns to those of their peers. In order to do this, we needed more sophisticated business intelligence software to form the heart of our program. CareEnhance Episode Profiler from McKesson (San Francisco)was the choice primarily because it could transform huge amounts of clinical and financial data into actionable information.
The software groups services into "episodes of care," which encompass all services a member receives for a condition — including office visits, tests, hospitalizations, pharmaceuticals and surgical procedures — regardless of treatment duration. A case-mix adjusted efficiency index is then applied that compares providers to their peers in how they allocate resources to treat patients, an approach that helps physicians understand the true meaning of the information.
Even with the considerable effort it took to convert our data to the appropriate formats and configurations, we had our first set of reports available within six months after signing our contract. The vendor showed us how the software worked at implementation; from there, we developed our own capabilities for accessing the data and building reports for our specific needs. For example, we've had providers that have tried to attribute their practice variations to the regions in which they practice or to specific product lines, so we developed reports that can either prove or disprove their contentions.
BCBSKS supplies physicians with "provider utilization reports" (preferable to "report cards") twice a year, incorporating graphics where possible to capture interest and enable fast review. Each report incorporates three years of information to minimize the impact of changes in the physician's patient population or large shifts in patient type.
To help physicians "climb on board," which is essential in our area with its scarcity of physicians, BCBSKS initiated an intensive education program about six months before reporting began. We held over 50 meetings with physician leaders and influential groups throughout the state to describe and collect input on the program, which helped bring home the potential value of the information to our physician network. In addition, physicians were assured that the program was a tool to improve medical care, not to perform economic credentialing.
At every step, BCBSKS has been as non-threatening as possible. Physicians are given the opportunity to change the peer group to which they are assigned, and at no point do the reports identify a physician by name to another physician. Patient care and practice improvement are always emphasized, and each physician receives a carefully crafted, personally addressed letter with his or her information. In fact, we spend as much time choosing the wording of these letters as we do prepping the information that we're sharing.
If a profile shows significant variance from a peer group, we meet with the physician individually or with his or her group to better understand the practice and potential reasons for the variances. Differences that are not explainable are monitored for change, and physicians continue to receive information about the identified issue. Since the beginning of our program, we've hosted about 250 of these meetings. Our goal is to change behavior and protect the integrity of the network, not eliminate physicians who don't comply.
The response to the profiling program has been very positive, and physicians clearly understand that improving medical practice, not just reducing costs, is the goal. Typically when we send out a mailing of about 2,900 reports we receive 15 to 20 inquiries of physicians wanting to understand the information better.
BCBSKS now provides individual utilization reports on a semiannual basis to medical doctors, doctors of osteopathy, doctors of podiatric medicine, chiropractors, registered physical therapists, psychologists and social workers.
To assess the impact of our profiling efforts, BCBSKS examined physicians' overall efficiency indexes, which measure the case-mix adjusted cost of care. My team enlisted the support of the organization's actuarial staff in this process, as they determine BCBSKS's rates and have a great deal of credibility; bringing them into the calculations enabled us to get corporate buy-in on the amount of savings or the amount of dollars not spent.
A physician with an efficiency index of 1.00 has case-mix adjusted costs that mirror his or her specialty; an index of 1.20 indicates costs that are 20 percent higher, or the physician is 20 percent less efficient than his or her peer group. Indexes lower than 1.00 may suggest a physician is under-serving his or her patients, so the goal is to move the efficiency indexes to the center point.
BCBSKS compared the efficiency indexes of roughly 2,300 physicians over two three-year periods: one ending June 1999 and the other ending June 2002. We projected what their costs would have been had their indexes not become more efficient over time by multiplying the first efficiency index by the specialties' average episode cost for the second time period. Then we compared that sum to the total cost in the second time period, arriving at a savings of $5.8 million per year.
Examining "hot spots"
BCBSKS can also report on individual areas of utilization concern, both to the organization as well as to physicians. Only those affected by these reports receive them, and we time them so they don't coincide with the overall reports.
BCBSKS has addressed escalating radiology costs, encouraged the prescription of generic drugs, investigated evaluation and management (E&M) services more closely, and gained a greater understanding of how efficient different types of providers are in treating lower back pain, among other projects. A few results:
Radiology costs, once rising 30 percent a year, are now rising by only 20 percent.
A reduction in coding of upper-level E&M services resulted in a savings of $100,000 over a six-month period.
Practice patterns for physical therapists and chiropractors, a significant number of whom had efficiency indexes of 2.0 or greater, have now gained greater consistency.
Openness for improvement
Given meaningful data, physicians will respond positively; the proof is in our shifting efficiency indexes. We use our program to highlight problems, not point fingers, to encourage better care, not brandish a big stick. Sophisticated technology and respectful communication are two critical elements in affecting change.