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Tiered health plans cut costs, and doctors

By Megg Mueller on October 2nd, 2010

Everyone is looking to cut health care costs--even insurance companies. One way they do it, however, has doctors and the American Medical Association (AMA) in a bit of an uproar. The practice of "physician profiling" isn't a new one, but it's one that has taken center stage recently as the data used to categorize doctors is being called into question.

What is "physician profiling"?

Health insurance companies like WellPoint, Cigna, UnitedHealth and Aetna offer employers the option of using "tiered health plans" to provide medical insurance coverage to employees. Tiered health plans include about half the doctors and two-thirds the hospitals as regular plans. The doctors chosen are the ones that the insurance companies have deemed to be the most efficient, i.e., cost-effective, to cover. Smaller companies, and even some larger ones, are starting to pursue these types of plans, because with reduced access comes reduced premiums, some up to 15 percent, according to a story in the New York Times.

The AMA strikes back

The AMA has sent a letter about physician profiling, on behalf of itself and state medical organizations, to 47 health plans in the country. The AMA is claiming that the data the insurers are using to rate doctors is faulty, resulting in almost one-quarter of physicians being classified incorrectly, and in certain specialty fields, doctors are wrongly identified two-thirds of the time. These errors, the AMA contends, make profiling in its current form a faulty tool and does not accurately define the quality of care a doctor provides.

Doctors, it stands to reason, hate profiling. Being judged and evaluated is always tough, but if the data is incorrect, that makes the process even more awful. But quality control is a good thing, especially when it comes to soaring health care costs. But if the lines between efficiency and quality are blurred, that doesn't necessarily equal the best care. It could just mean the fastest and cheapest, which while good for our wallets, might not be the best for our health. Sadly, in this economic reality, employers have to find ways to cut costs, and tiered health plans are a very viable option.

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