Why, all of a sudden, are we being inundated with an avalanche of data about what doctors do and how much they're paid? Examples:

  • "Secrets of the System," a Wall Street Journal series now running that explores individual physician billings to Medicare released after a three-decade-old court order limiting access.
  • The launch last Tuesday of the government's Open Payments site. Mandated by Section 6002 of the ACA, the so-called Sunshine Act requirements reveal payments by medical device and drug manufacturers to physicians from August to December 2013.

Why all the fuss? The reasons are simple, and for hospitals a growing concern:

1. Physicians influence the vast majority of spending in health care. Though they're paid directly, only one-fourth of the total spend, their recommended treatments, tests, procedures and prescriptions drive the lion's share of spending. Patients trust these recommendations, and only a handful are inclined to challenge their accuracy or appropriateness. Physicians like being in charge of patient care and they want to be the decision-makers for their patients. They don't like intrusion into their ways of doing business, and transparency is a distraction.

2. Physicians care about their incomes and, like everyone, they want to earn more. As a result, they vex about payment cuts by Medicare and private plans, resent media intrusion about what they earn, and look for ways to compensate when their operating costs increase faster than their incomes. Many make up for cuts by working harder and doing more, even when there's marginal benefit. Some choose hospital employment; others join larger groups; and a few retire early. And all are uncomfortable with the notion that their incomes might be seen by anyone other than their accountants, or their outcomes accessible to anyone.

3. The profession has resisted transparency. Physicians have fought against transparency at every corner. They reason that the art and science of medicine is so complex and their stewardship of patients so unique that measurement is wrought with imprecision and prone to mass misinterpretation. The point is well-taken. Many report cards and physician profiles use raw data that are unadjusted for unique practice procedures, patient populations or how clinical orders are codified in their information systems. And the payment system can be equally misleading: costs that bear no resemblance to charges, reimbursement unrelated to the intensity of services rendered, and so on. That said, powerful statistical modeling tools, the availability of evidence-based best practices to which physician behaviors can be compared, sophisticated methods for tracking patient outcomes and granular data about fixed and direct costs attributable to a physician's practice pattern mute criticism that measurement is impossible. Physician resistance to transparency might resonate with seniors and a few baby boomers but, in the information age, it falls on deaf ears to others.

For hospitals, physician resistance to transparency poses incredible challenges. It exposes hospital boards and management to greater risk and requires new policies and procedures as they become partners with physicians in risk-sharing arrangements with payers. Consider …

  • Credentialing: How is medical staff credentialing linked to valid and reliable measures of each physician's adherence to evidence-based practices and optimal patient outcomes? Is the process airtight in terms of precise measures validated by sophisticated metrics to optimize care, or is licensing approved by medical boards that rely on minimal information to assess a physician's suitability to practice? And should efficiency — the minimization of costs where there's no clinical benefit gain — be considered in credentialing?
  • Risk-sharing: In risk-sharing agreements with payers, i.e., bundled payments, accountable care, et al., is a physician's practice pattern prone to efficiency and conservative use of tests, procedures and treatments, or inclined to overutilization? And, are the practitioners' financial relationships with drugmakers, device manufacturers and outside interests consistent with the scrutiny to be expected in a business partnership that's of keen interest to outsiders? Physicians capable of practicing in a fee-for-service environment might not be candidates to participate in emerging models requiring risk-sharing and heightened transparency.
  • Leadership: Do leaders of the hospital's medical staff embrace transparency, or resist?

The public's appetite for information about physicians is not going to subside. Transparency about a physician's clinical performance and business relationships is increasingly accurate and widely accessible. For hospitals and physicians, it's an uncomfortable spotlight that's growing brighter.

Paul H. Keckley, Ph.D., a health economist and expert on U.S. health reform, is managing director at the Navigant Center for Healthcare Research and Policy Analysis. His H&HN Daily column appears the first Monday of every month. He is a member of Health Forum's Speakers Express. For speaking opportunities, contact David Parlin.