Some physicians and physician groups are quite upset about insurers’ recent moves to offer employer customers tight, small networks of providers based on quality and cost criteria. In an effort to block these new plans, the AMA and other groups are focusing on the few problems with ratings and avoiding the larger issue – some physicians are just bad actors.

What they should be doing is working closely with health plans and regulators to ensure the rating process is transparent, fair, and objective.

Insurers, governmental agencies, employers, coalitions, organized labor, all have been involved in assessing provider performance, many for years. CMS has launched several initiatives including measures for nursing homes, hospitals, and more recently, a nascent physician quality reporting program.

In the private sector, a Mercer survey indicates 14% of large employers were using such “high-performance” health-provider networks in 2009, an increase from 12% in 2008.

According to the AMA, “Physicians’ reputations are being unfairly tarnished using unscientific methodologies and calculations.” The complaint appears to be based in part on concern that individual physician ratings may be derived from too few data points and some physicians may treat more severe or complex cases, and therefore their ratings will suffer – unfairly.

Health plans responding to the concerns contend they have dealt with the issue by rating physician groups instead of individual physicians.

The AMA’s contention has some validity, just as the health plans’ responses should be taken seriously.

The larger point is simple – networks based in large part on provider ratings are absolutely, inevitably the wave of the future. Some provider organizations, including the Minnesota Medical Association, have already bought into the trend, are engaging with payers, and helping to improve the assessment process.

The attempt by some ‘provider advocacy’ (my term) organizations to stop or hinder this is misguided and eventually counterproductive. Throughout history, guilds and labor organizations have tried to protect all members, including members they should censure, in an effort to keep control of their industry. Eventually, these efforts all fail.

What does this mean for you?

Providers would be well served to focus on substantive issues in provider rating systems, and realize protecting the bad actors hurts all providers and helps none.

Joseph Paduda is the principal of Health Strategy Associates, and blogs at Managed Care Matters.

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