Number Crunch: What Does the Release of Medicare Physician Payment Data Mean for Providers?

In April, long-awaited data on Medicare physician payments were finally made public by the Centers for Medicare & Medicaid Services (CMS). The release contained information on 880,000 physicians and other healthcare providers who took in a total of about $77 billion in payments in 2012.

Some of the numbers were eye-popping—for instance, 2 percent of physicians received about 25 percent of the total payments in 2012—but a closer look revealed the complexity hidden by the raw numbers. Some physicians bill for a whole practice, and others see payments eaten up by high overhead. To help us make sense of what it all means, Health Imaging reached out to Amitabh Chandra, PhD, professor of public policy at the Harvard Kennedy School in Boston, for some questions.

How useful will this release of information be, beyond promoting transparency?

Amitabh Chandra: In its current form, not particularly useful at all. Think of this as Stage 1 of the effort to put a man on the moon. First, we learn to build and launch rockets, then we learn to get them to circle the earth, then get to the moon, then circle the moon, then land on the moon, then put a man on there. It’s only when we hit stage 3, which is about three to five years away, that it’ll start to be useful for patients and providers.

Our mission is that we want the price of healthcare to reflect the value of the services that physicians provide. That’s the goal. Unfortunately, when you simply release data on payments like this, there’s nothing about value in there at all. Simply counting up the dollars doesn’t tell us much.

What’s your opinion on the coverage so far and how CMS handled the release?

AC: It’s not clear to me that it’s CMS’ job to get into the messaging of how these data should and should not be used. CMS has jumpstarted the conversation about getting more value out of what we spend in healthcare by releasing these data. But I think we sensationalized the data release by claiming that it did more than it actually did.

Will release of this type of payment information impact the various specialties in different ways?

AC: I think different specialties will be affected differently by data releases like this. In particular, the specialties where you can do self-referral will be hardest hit. Someone like an interventional radiologist will be affected a lot more than a diagnostic radiologist who relies on other physicians for referrals. Self-referring specialties, like cardiology and some urology sub-specialties, are really under the microscope now.

What’s the biggest takeaway for providers?

AC: This data release is just a long-winded way of saying measurement is finally coming to healthcare. We’re in the early days of measurement, so the first draft is far from perfect. It’s not even particularly good. It’s just an alphabet soup of things and we don’t quite know what is what. But the fidelity of measurement will improve and we will learn more from these data over time. The first thing that’ll happen is the measurement of who’s getting paid what will improve, so we won’t have the problems we that we just saw in the latest release. Then people, plans in particular, will use that data to create narrower networks, so they’ll start to exclude providers who they think are doing too much without generating a lot of value. Then the third iteration will actually start to measure the value of care that providers are delivering patients.

For an area like radiology, this is going to be incredibly difficult to do. It’s very hard to measure the quality of care that radiologists deliver because what they deliver is sort of part of a package of services that a delivery system is providing a patient, so it’s almost impossible to say, “this is what the radiologist produced in terms of the benefit to a patient.” Rather, what will likely happen is that we’ll be reporting it at the level of a provider group or an integrated delivery system.

How should radiology prepare for the future?

AC: These data are not relevant for payment policy today, but they will be tomorrow. That’s another way of saying that providers who get ahead of the game on their own self measurement, and who start to think about how it might be possible to measure quality of care and the value of care that patients receive, will be in a real position of strength 3 to 5 years from now.