Physician profiling: can Medicare paint an accurate picture?

Physician profiling, that is, the comparison of the health care services used by a physician's patients to average service use or another benchmark, has been proposed as a way to improve Medicare. It has been used by private health plans and physician groups to identify both efficient practice patterns and the physicians who practice efficiently. The Medicare Payment Advisory Commission (MedPAC) and the Government Accountability Office (GAO) have recommended that Medicare adopt physician profiling to slow spending growth and improve efficiency. Recent legislation would mandate that Medicare employ profiling. This issue brief reviews MedPAC and GAO's analyses of profiling, concerns about using this type of information, and the obstacles in incorporating profiling in the Medicare program.