The General Accounting Office (GAO) has issued a report recommending physician profiling, which they define as identifying efficient physicians. The entire report, i.e., GAO-07-307, is available at the following link:

Following are key findings:

GAO estimates that physician account for 20% of the total health care expenditures, but influence 90% of total expenditures through referrals, admissions, etc.

Physician profiling activities occur in Medicare today, but they focus largely on improper billing practices rather than on efficient care delivery.

The report (1) estimates the prevalence in Medicare physicians who are likely to practice medicine inefficiently, (2) examines physician-focused strategies used by public and private sector health care purchasers to encourage efficient medical care, and (3) examines the potential for CMS to profile physicians in traditional Fee For Service (FFS) Medicare for efficiency and use the results in ways that are similar to other purchasers that encourage efficiency.

Overly expensive beneficiaries account for nearly one-half of total Medicare expenditures even though they represent only 20% of beneficiaries in the sample. 

Pittsburgh was included in the 12 metropolitan areas in which Medicare claims were examined. Pittsburgh’s percentage of outlier physicians was 3.8%, which was tenth on the list, with the lowest being Albuquerque, New Mexico, at 2.0%, and the highest being Miami, Florida, at 20.9%.

GAO recommends that CMS develop a profiling system which includes the following elements:

§      total Medicare expenditures as the basis for measuring efficiency, adjustments for differences in patients’ health status,

§      empirically based standards that set the parameters of efficiency,

§      a physician education program that explains to physicians how the profiling system works and how their efficiency measures compare with those of their peers,

§      financial or other incentives for individual physicians to improve the efficiency of the care they provide, and

§      methods for measuring the impact of physician profiling on program spending and physician behavior.