Profiling Efficiency and Quality of Physician Organizations in Medicare

This article presents a methodology for profiling the cost efficiency and quality of care of physician organizations (POs). The method is implemented for the Boston metropolitan area using 2002 Medicare claims. After adjustments for case mix and other factors, 4 of 30 organizations are identified with different than average efficiency. Twenty-one of 30 organizations are identified with a different composite quality of care than average. Without changes in PO behavior, the gains from redirecting patients from lower to higher efficiency and quality providers are likely to be limited.