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The Challenge of Measuring Surgeon Spending for Payment Policies

VonAchen, Paige, BS*,†; Hayward, Rodney A., MD*,‡,§; Norton, Edward C., PhD*,§,¶; Denton, Brian, PhD*,†; Ellimoottil, Chad, MD, MS*,||

doi: 10.1097/SLA.0000000000002770

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.

*Institute for Healthcare Policy and Innovation, University of Michigan, Ann Arbor, MI

Department of Industrial Engineering, University of Michigan, Ann Arbor, MI

Department of Internal Medicine, University of Michigan, Ann Arbor, MI

§Department of Health Management and Policy, University of Michigan, Ann Arbor, MI

Department of Economics, University of Michigan, Ann Arbor, MI

||Department of Urology, University of Michigan, Ann Arbor, MI.

Reprints: Chad Ellimoottil, MD, MS, Assistant Professor, Institute for Healthcare Policy and Innovation, University of Michigan Department of Urology, Ann Arbor, MI 48109. E-mail:

VonAchen had full access to all of the data in the study and takes responsibility for the integrity of the data and the accuracy of the data analysis and also did the statistical analysis.

VonAchen, Hayward, Denton, Ellimoottil did the study concept and design; acquisition, analysis, or interpretation of data; drafting of the manuscript; critical revision of the manuscript for important intellectual content.

Denton, Ellimoottil did the study supervision.

Reprints will not be available from authors.

No funding was involved in the design and conduct of the study.

No funding organization was involved in the design and conduct of the study; collection, management, analysis, and interpretation of the data; preparation, review, or approval of the manuscript; and decision to submit the manuscript for publication. Dr. Ellimoottil receives salary support from Blue Cross Blue Shield of Michigan for his role as the director of analytics for the Michigan Value Collaborative.

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