To a sick person the notion sounds chilling: that your doctor might be judged on how well he keeps a lid on costs, not just on how well he practices medicine. But more hospitals, squeezed by private and government insurers, are laying the groundwork for using economic factors to help evaluate doctors. Physicians who consistently cost a hospital money-by ordering tests, for instance, that aren’t fully reimbursed by private insurance or Medicare, the federal health-insurance program for the elderly–could be disciplined. The process, dubbed “economic credentialing,” has yet to be widely applied, but it is already generating heated ethical, legal and medical debates. Some doctors, already feeling second-guessed by insurers, believe the trend could hurt quality and deny service to poor and elderly patients. Hospitals insist that cost control can be compatible with quality treatment. “It doesn’t make sense to have the world’s greatest physician if he drives the hospital into bankruptcy,” says Dr. William Jessee, a vice president of Humana, the health-maintenance giant.
Few hospitals have taken the idea farther than Dr. Nowakowski’s. When a physician is up for reappointment at the Upper Chesapeake Health System, which runs two hospitals north of Baltimore, the hospitals compare his performance with the average of other doctors (chart). A doctor can get a warning letter if his patients’ average length of stay exceeds the state average by 14 days and his total per-patient charges exceed the hospital average by $3,000. The doctor’s figures are adjusted to account for treating patients with costly illnesses. If a physician doesn’t improve after several warnings, the hospital may place him on probation.
So far only Dr. Nowakowski has been reprimanded; at least eight other doctors have received a total of 20 warnings. Upper Chesapeake hospital officials wouldn’t comment, but they’ve told trade publications that one of their hospitals went from Maryland’s second most expensive to 37th. While several doctors say relations with the hospital are strained, they admit they’ve cut costs effectively. One doctor stopped giving medication by intravenous solution bags, which cost $150 each, in favor of oral medication at $5 a pop-with no problems. He also refrains from ordering all of his tests on an emergency basis, which costs $6.95 more per test.
Other hospitals may be hard pressed to copy Upper Chesapeake’s get-tough program. For one thing, it’s the only hospital system in Maryland’s Harford County, and doctors have little choice but to go along. Instead, more hospitals are using an “educational” approach to get doctors to control costs by sharing billing records with them. The medical staff at Philadelphia’s Nazareth Hospital approved a voluntary system last year. A box score is posted periodically, showing each doctor’s statistics on length of stay, costs and such. The doctors are identified only by a number. “Even though physicians are egomaniacs they are also empirical,” says Dr. Frederick Laucius, a Nazareth physician. “If you have 48 days average length of stay and everyone else is two days, you figure you have to mend your ways.”
To some extent the controversy is a battle over turf-. doctors resent what they see as hospitals’ intrusion into the traditional peer-review system for evaluating colleagues. But critics say the trend is dangerous. Dr. Howard Lang of the American Medical Association argues that economics should play a role only as it affects quality of care. Lang and others say doctors might withhold necessary tests or discharge early for fear of running afoul of hospital averages. They also say that doctors who treat too many poor patients or those with expensive illnesses, like AIDS, could be punished. Indeed, the Upper Chesapeake hospitals tried to penalize doctors whose charity cases and bad debt exceeded 15 percent of their charges. But physicians objected and the provision was dropped.
Yet with everyone looking for ways to control soaring health bills, physicians will be under increasing pressure to find ways of maintaining quality while cutting costs. If doctors fail to get that message, more hospitals will crack down-and force doctors to swallow a medicine they don’t like.
Upper Chesapeake hospitals use some of the following criteria to evaluate how cost effective their doctors are:
Excessive if more than 14 days above state average.
Total per-patient charges must not be greater than $3,000 above the hospital average.
Unsatisfactory if insurers turn down doctor more than five times in one year for reimbursement.
Excessive if doctor is named in one settlement of more than $30,000 a year, or two or more settlements of any size in one year.
SOURCES. MEDICAL ECONOMICS; MODERN HEALTHCARE
