New Multi-Stakeholder Effort to Measure the Efficiency of Health Care Providers

Until now, there lacked a systematic, empirically informed and consensus-based process to understand how best to measure the cost efficiency of health care providers. Instead, organizations have set out on their own to introduce efficiency measurement initiatives. These initiatives have often been met with resistance from doctors and hospitals on the meaningfulness and validity of the results, in addition to the lack of transparency in the underlying measurement methodologies.

The Leapfrog Group and Bridges to Excellence, supported in part by a grant from the Commonwealth Fund, have established a working group of industry stakeholders and experts to launch an on-going, collaborative process to provide guidance on measuring provider efficiency based on the best available knowledge.

The group’s white paper, Measuring Provider Efficiency, Version 1.0, presents a framework that can be used as a basis for measurement today, and is meant to be a catalyst for stimulating the further evolution and refinement of efficiency measurement. To that end, an online learning community has been set up at www.regence.com/research to facilitate continued knowledge sharing.

The National Committee for Quality Assurance (NCQA), a key collaborator in this effort, will develop evaluation methods to help determine the extent to which health care organizations measure physician and hospital performance following principles set forth in the white paper. (See www.ncqa.org/programs/qualityplus for more information.) Until the NCQA’s work is complete, the white paper will be periodically updated with new knowledge and information.

The white paper working group does not make specific recommendations on how purchasers and plans should use efficiency measures to promote improvement, for the management of provider networks, pay-for-performance initiatives, or consumer decision support. The group recommends that any organization measuring provider efficiency (1) communicate to all stakeholders the specific methodology used and any rationale for varying from recommendations in the white paper, (2) publish the confidence interval around the results, and (3) participate in the online learning community at www.regence.com/research to share the results of their work.