Foxes in the henhouse: The limits of health plan MD ratings

Over the few days, Aetna and Empire Blue Cross and Blue Shield agreed to restrictions on their physician ratings programs, following similar concessions by CIGNA late last month. And it's not just these companies under scrutiny. New York wants to see any and all of the state's health plans follow some common procedures when rating doctors, such as:

* Making sure that rankings are based on more than cost, and identifying to what extent cost is a factor
* Risk adjusting physician quality ratings
* Disclosing to consumers and physicians how the rankings are built, and giving both a chance to complain if the rankings seem inaccurate

These measures seem to have met with the approval of the AMA, which, not surprisingly, is happy to see the state keep the medical playing field level.

However, if I were a doctor, New York's actions wouldn't cheer me much. Even if such rules ripple out across the country and throughout the industry, you've still got "foxes in the henhouse" problem when it comes to health plan ratings.

Even assuming good faith efforts on their part, how can health plans possibly avoid tilting ratings very strongly toward lower costs?  Yes, quality programs that ask the physicians to do something, like ensure that diabetics get eye exams, make sense to them sometimes. But overall, they have a far stronger incentive to limit care--and to reward physicians that do the same. (One possible exception to this is the program WellPoint has rolled out in cooperation with Zagat; this ratings plan seems to gather a great deal, if not all, of its ratings content from consumers.)

Honestly, I think many consumers will catch on over time, and take ratings from their friendly insurance company with a large grain of salt. In the mean time, however, expect to see a lot more regulatory activity in this area. - Anne

P.S.  By the way, if you think third-party physician ratings companies like HealthGrades are building up steam now, just wait--that sector is poised to explode, for just the reasons I've outlined here. A firm mixing a large base of consumer ratings data (a la Zagat) with good professional data (like Health Grades) has nowhere to go but up. More on this in a future column.