Provider Network Quality

Grading the Doctor

Doctors are interested in finding out how they compare to their peers.
By: | June 2, 2014 • 9 min read

Efforts to improve the quality of medical care provided to injured workers are increasingly linked to rating doctor performance.

Yet measuring doctor performance is in its infancy while risk managers said they struggle to define what constitutes “quality” in medical care and to determine whether their injured employees receive it.

“That is one of the things we always struggle with,” said Bill Wainscott, manager of workers’ compensation and occupational health for International Paper in Memphis.

“We are sending employees to doctors and doing everything we can to control the costs, but it is hard to do things to control the quality. We have a lot of programs in place such as provider networks and negotiated medical fees, but it is very difficult to really ensure that the employees are getting the right care and that it is the right level of care and that they are seeing the right doctors within the medical community.”

While workers’ compensation observers commonly equate searching for medical quality with searching for the Holy Grail, the level of care workers receive has a real impact on employers and workers.


“If you don’t look at medical quality, it is going to drive up your costs and the employee is not going to get back to work as quickly,” Wainscott said. “In the long run, we are both going to be hurt, both the employee and International Paper.”

So some insurers, third party administrators, and network providers continue refining their efforts to analyze treatment outcomes and other data necessary to rate doctor performance despite limitations, such as difficulties evaluating physicians in some regions of the nation because of too little existing data on doctor experience when treating injured workers.

The practice is reducing costs and claims durations while increasing discussions between payers and doctors increasingly interested in how information about their claims outcomes might improve the care they deliver, experts said.

Doctors’ increased interest in knowing how worker’s compensation payers view their performance and the methods used to rank them follows from efforts to allow only doctors who exhibit certain performance rankings into “outcomes-based networks,” several experts said.

Limiting involvement in medical provider networks to only those doctors with certain scores evolved from the older practice of allowing any physician agreeing to a price-discount contract to participate in a preferred provider organization.

In one of the more recent evolutions of doctor “score carding,” some organizations are ranking individual doctors so payers can help steer injured workers, as much as state laws allow, to the higher scorers without having to build an outcomes-based network or consider the physician’s affiliation with an existing PPO or network.

Some payers are also linking doctor pay-for-performance strategies and the amount of utilization review conducted to a specific doctor’s ranking.

While ranking doctors is important in a drive to improve care quality for injured workers, just determining what factors might help create universal qualitative indices for assembling networks is challenging, said Bob Evans, national director of network solutions in Chicago for Rising Medical Solutions.

That is especially true when organizations lack enough data to make objective determinations about doctors, he said.

Bob Evans, national director of network solutions, Rising Medical Solutions

Bob Evans, national director of network solutions, Rising Medical Solutions

“We do a lot of things related to rating and ranking and making decisions based on qualitative factors,” Evans said. “But one of the challenges we have is very similar to what everybody else [in the industry faces]. What qualitative factor are you going to base a decision on today and do you have enough data?”

Data on doctors who either score very well or score very poorly is typically easiest to obtain, Evans said. The biggest challenge rests with obtaining enough observations on the vast majority of doctors ranking in the middle, he added.

International Paper’s Wainscott faces a similar challenge when trying to send employees to the best doctors in a community. Many doctors have treated too few workers’ compensation claimants to produce enough information for adequately understanding their performance, he said.

“It may be a good thing that you don’t have enough data because that means you are not having a lot of claims, but there are instances where we just don’t have a lot of data for a doctor,” he said.

“I have areas of the country where I don’t have grades for a doctor or maybe I only have one or two doctors graded and they may have middle of the road scores. It may not be bad to use them but I don’t know if they are the best in the community.”

Return to Work the Ultimate Measure

Measures applied to uncovering doctor performance include making inferences about the effectiveness of treatment they render, said Dr. David Deitz, vice president and national medical director for Liberty Mutual in Boston. That is accomplished, for example, by evaluating factors such as patient recovery time when one orthopedic surgeon performs a knee surgery in contrast to recovery time when another surgeon conducts the same operation.

“What we are trying to look at when we look at quality is what is the outcome of treatment and that can be difficult,” Deitz said. “But one of the great things about occupational medicine is you actually have a proxy for recovery and it is called return to work.”

Dr. David Deitz, vice president, national medical director, Liberty Mutual

Dr. David Deitz, vice president, national medical director, Liberty Mutual

So return-to-work durations are among many factors analyzed to determine care quality provided by specific doctors.

Only focusing on outcomes is inadequate, though, said Gregory Moore, president of Harbor Health Systems LLC in Irvine, Calif., which builds outcomes-based networks and benchmarks doctors in existing networks.

Outcomes can show a doctor is exceptionally good, for example, at performing shoulder surgeries, Moore said. But strictly focusing on outcomes may fail to reveal that not all the surgeries performed by that doctor were necessary.

Score carding a physician is a complicated process, he said, in part because it’s common for more than one doctor to treat a claimant. So Moore’s company evaluates medical bills in comparison to outcomes.


Companies ranking physicians said they also look at ease of patient access, attention to medical guidelines, reoperation rates, treatment costs, length of time from the first treatment to the last, and expenses before and after bill review is conducted, among other information.

Research shows that physician networks staffed with doctors exhibiting particular characteristics produce better outcomes, experts said.

For example, recent claims data research from the California Workers’ Compensation Institute shows that doctors participating in California medical provider networks, or MPNs, reduce costs by $590 per claim during the first 24 months of care in contrast to non-MPN physicians, said CWCI President Alex Swedlow.

Those outcomes are associated with the MPN physicians’ greater concordance with treatment guidelines that lower utilization, Swedlow added.

Older CWCI research showed that doctors with greater experience treating occupational injuries are associated with lower treatment costs, shorter return-to-work durations and a lower rate of litigated claims, he said.

Such data suggests that recruiting physicians possessing high levels of experience treating work injuries is a reasonable strategy for building a “high performance network,” Swedlow said.

Organizations that rank providers also said they see positive results.

Sedgwick Claims Management Services Inc. scores doctors nationwide, using a one star to five star ranking system. It found that the average incurred medical cost to treat an injured worker when a five-star doctor provides the first treatment is $3,643. In contrast, the average cost when a three-star doctor provides the first treatment is $6,340, rising to $12,342 when a one-star doctor provides the service.

Sedgwick has found differences in other substantial factors such as lower claims durations associated with higher ranking doctors, said Kimberly George, senior VP and senior healthcare advisor.

The fact that analysis reveals significant disparities in doctor performance and differences in the treatment utilization and costs they generate signifies that medical care quality is obtainable, said Patrick J. Walsh, VP and chief claims officer at Accident Fund Holdings Inc. in Lansing, Mich.

“There are docs out there who are trying to do the right thing and get people well,” he said. “We are seeing that in the data [among doctors that Accident Fund scores]. If that were not the case all these providers would be ranked on top of each other. But we are able to rank them and there is quite a spread between what we call ‘a high performing doctor’ and a ‘low performing physician.’ ”

While some doctors still detest performance grading, an increasing number are concerned about their scores and how to improve them, several experts said.

They are learning more about their effectiveness, Moore said.

Some doctors who believed they were providing exceptional care, for example, are finding in some instance that patients they thought had recovered, instead sought treatment elsewhere.

Moore is not alone in reporting that doctors are learning more about their practices.

When Liberty Mutual Group’s claims data revealed that a clinic treating injured workers dispensed excessive amounts of pain medication, the network clinic doubted the insurer’s information.

But following an internal inquiry, the clinic — whose doctors were otherwise considered good network provider partners by the insurer — learned there was indeed a problem requiring it to bolster its pharmacy controls.

“If you only know three or four good doctors in an area, you want to make sure you are getting to those. It’s not to say there are no other good doctors. It’s just that you have to go with information you have to get a positive outcome.” — Gregory Moore, president, Harbor Health Systems LLC

“Their original response was, ‘You guys got it wrong,’ ” Deitz said. “And we said, ‘OK, let’s talk about it.’ They wound up admitting that there were some things going on in their operation that they weren’t aware of.”

The back-and-forth between the insurer and the doctor group along with the physicians’ willingness to act on the insurer’s evaluation of their clinic operations followed from Liberty Mutual’s efforts to improve the quality of care delivered to injured workers by benchmarking medical provider performance.


In its bid to improve quality, Liberty Mutual invites doctors to respond to its evaluations. It’s a way of opening a dialogue, Deitz said.

Observers said doctor-rating practices will be further encouraged by the Patient Protection and Affordable Care Act and its push to increase medical care quality through accountable care organizations.

As score carding evolves, one of the next frontiers lies in implementing processes that help assure claims adjusters and others in contact with injured workers consistently use the information to help get patients to the higher scorers, Moore said.

Meanwhile, he advised taking advantage of available knowledge about care providers.

“In truth, what we need to focus on is maximizing the use of the best doctors,” Moore said.

“If you only know three or four good doctors in an area, you want to make sure you are getting to those. It’s not to say there are no other good doctors. It’s just that you have to go with information you have to get a positive outcome.”

Roberto Ceniceros is senior editor at Risk & Insurance® and chair of the National Workers' Compensation and Disability Conference® & Expo. He can be reached at [email protected] Read more of his columns and features.

More from Risk & Insurance

More from Risk & Insurance

Exclusive | Hank Greenberg on China Trade, Starr’s Rapid Growth and 100th, Spitzer, Schneiderman and More

In a robust and frank conversation, the insurance legend provides unique insights into global trade, his past battles and what the future holds for the industry and his company.
By: | October 12, 2018 • 12 min read

In 1960, Maurice “Hank” Greenberg was hired as a vice president of C.V. Starr & Co. At age 35, he had already accomplished a great deal.

He served his country as part of the Allied Forces that stormed the beaches at Normandy and liberated the Nazi death camps. He fought again during the Korean War, earning a Bronze Star. He held a law degree from New York Law School.


Now he was ready to make his mark on the business world.

Even C.V. Starr himself — who hired Mr. Greenberg and later hand-picked him as the successor to the company he founded in Shanghai in 1919 — could not have imagined what a mark it would be.

Mr. Greenberg began to build AIG as a Starr subsidiary, then in 1969, he took it public. The company would, at its peak, achieve a market cap of some $180 billion and cement its place as the largest insurance and financial services company in history.

This month, Mr. Greenberg travels to China to celebrate the 100th anniversary of C.V. Starr & Co. That visit occurs at a prickly time in U.S.-Sino relations, as the Trump administration levies tariffs on hundreds of billions of dollars in Chinese goods and China retaliates.

In September, Risk & Insurance® sat down with Mr. Greenberg in his Park Avenue office to hear his thoughts on the centennial of C.V. Starr, the dynamics of U.S. trade relationships with China and the future of the U.S. insurance industry as it faces the challenges of technology development and talent recruitment and retention, among many others. What follows is an edited transcript of that discussion.

R&I: One hundred years is quite an impressive milestone for any company. Celebrating the anniversary in China signifies the importance and longevity of that relationship. Can you tell us more about C.V. Starr’s history with China?

Hank Greenberg: We have a long history in China. I first went there in 1975. There was little there, but I had business throughout Asia, and I stopped there all the time. I’d stop there a couple of times a year and build relationships.

When I first started visiting China, there was only one state-owned insurance company there, PICC (the People’s Insurance Company of China); it was tiny at the time. We helped them to grow.

I also received the first foreign life insurance license in China, for AIA (The American International Assurance Co.). To date, there has been no other foreign life insurance company in China. It took me 20 years of hard work to get that license.

We also introduced an agency system in China. They had none. Their life company employees would get a salary whether they sold something or not. With the agency system of course you get paid a commission if you sell something. Once that agency system was installed, it went on to create more than a million jobs.

R&I: So Starr’s success has meant success for the Chinese insurance industry as well.

Hank Greenberg: That’s partly why we’re going to be celebrating that anniversary there next month. That celebration will occur alongside that of IBLAC (International Business Leaders’ Advisory Council), an international business advisory group that was put together when Zhu Rongji was the mayor of Shanghai [Zhu is since retired from public life]. He asked me to start that to attract foreign companies to invest in Shanghai.

“It turns out that it is harder [for China] to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

Shanghai and China in general were just coming out of the doldrums then; there was a lack of foreign investment. Zhu asked me to chair IBLAC and to help get it started, which I did. I served as chairman of that group for a couple of terms. I am still a part of that board, and it will be celebrating its 30th anniversary along with our 100th anniversary.


We have a good relationship with China, and we’re candid as you can tell from the op-ed I published in the Wall Street Journal. I’m told that my op-ed was received quite well in China, by both Chinese companies and foreign companies doing business there.

On August 29, Mr. Greenberg published an opinion piece in the WSJ reminding Chinese leaders of the productive history of U.S.-Sino relations and suggesting that Chinese leaders take pragmatic steps to ease trade tensions with the U.S.

R&I: What’s your outlook on current trade relations between the U.S. and China?

Hank Greenberg: As to the current environment, when you are in negotiations, every leader negotiates differently.

President Trump is negotiating based on his well-known approach. What’s different now is that President Xi (Jinping, General Secretary of the Communist Party of China) made himself the emperor. All the past presidents in China before the revolution had two terms. He’s there for life, which makes things much more difficult.

R&I: Sure does. You’ve got a one- or two-term president talking to somebody who can wait it out. It’s definitely unique.

Hank Greenberg: So, clearly a lot of change is going on in China. Some of it is good. But as I said in the op-ed, China needs to be treated like the second largest economy in the world, which it is. And it will be the number one economy in the world in not too many years. That means that you can’t use the same terms of trade that you did 25 or 30 years ago.

They want to have access to our market and other markets. Fine, but you have to have reciprocity, and they have not been very good at that.

R&I: What stands in the way of that happening?

Hank Greenberg: I think there are several substantial challenges. One, their structure makes it very difficult. They have a senior official, a regulator, who runs a division within the government for insurance. He keeps that job as long as he does what leadership wants him to do. He may not be sure what they want him to do.

For example, the president made a speech many months ago saying they are going to open up banking, insurance and a couple of additional sectors to foreign investment; nothing happened.

The reason was that the head of that division got changed. A new administrator came in who was not sure what the president wanted so he did nothing. Time went on and the international community said, “Wait a minute, you promised that you were going to do that and you didn’t do that.”

So the structure is such that it is very difficult. China can’t react as fast as it should. That will change, but it is going to take time.

R&I: That’s interesting, because during the financial crisis in 2008 there was talk that China, given their more centralized authority, could react more quickly, not less quickly.

Hank Greenberg: It turns out that it is harder to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.

R&I: Obviously, you have a very unique perspective and experience in China. For American companies coming to China, what are some of the current challenges?


Hank Greenberg: Well, they very much want to do business in China. That’s due to the sheer size of the country, at 1.4 billion people. It’s a very big market and not just for insurance companies. It’s a whole range of companies that would like to have access to China as easily as Chinese companies have access to the United States. As I said previously, that has to be resolved.

It’s not going to be easy, because China has a history of not being treated well by other countries. The U.S. has been pretty good in that way. We haven’t taken advantage of China.

R&I: Your op-ed was very enlightening on that topic.

Hank Greenberg: President Xi wants to rebuild the “middle kingdom,” to what China was, a great country. Part of that was his takeover of the South China Sea rock islands during the Obama Administration; we did nothing. It’s a little late now to try and do something. They promised they would never militarize those islands. Then they did. That’s a real problem in Southern Asia. The other countries in that region are not happy about that.

R&I: One thing that has differentiated your company is that it is not a public company, and it is not a mutual company. We think you’re the only large insurance company with that structure at that scale. What advantages does that give you?

Hank Greenberg: Two things. First of all, we’re more than an insurance company. We have the traditional investment unit with the insurance company. Then we have a separate investment unit that we started, which is very successful. So we have a source of income that is diverse. We don’t have to underwrite business that is going to lose a lot of money. Not knowingly anyway.

R&I: And that’s because you are a private company?

Hank Greenberg: Yes. We attract a different type of person in a private company.

R&I: Do you think that enables you to react more quickly?

Hank Greenberg: Absolutely. When we left AIG there were three of us. Myself, Howie Smith and Ed Matthews. Howie used to run the internal financials and Ed Matthews was the investment guy coming out of Morgan Stanley when I was putting AIG together. We started with three people and now we have 3,500 and growing.

“I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

R&I:  You being forced to leave AIG in 2005 really was an injustice, by the way. AIG wouldn’t have been in the position it was in 2008 if you had still been there.


Hank Greenberg: Absolutely not. We had all the right things in place. We met with the financial services division once a day every day to make sure they stuck to what they were supposed to do. Even Hank Paulson, the Secretary of Treasury, sat on the stand during my trial and said that if I’d been at the company, it would not have imploded the way it did.

R&I: And that fateful decision the AIG board made really affected the course of the country.

Hank Greenberg: So many people lost all of their net worth. The new management was taking on billions of dollars’ worth of risk with no collateral. They had decimated the internal risk management controls. And the government takeover of the company when the financial crisis blew up was grossly unfair.

From the time it went public, AIG’s value had increased from $300 million to $180 billion. Thanks to Eliot Spitzer, it’s now worth a fraction of that. His was a gross misuse of the Martin Act. It gives the Attorney General the power to investigate without probable cause and bring fraud charges without having to prove intent. Only in New York does the law grant the AG that much power.

R&I: It’s especially frustrating when you consider the quality of his own character, and the scandal he was involved in.

In early 2008, Spitzer was caught on a federal wiretap arranging a meeting with a prostitute at a Washington Hotel and resigned shortly thereafter.

Hank Greenberg: Yes. And it’s been successive. Look at Eric Schneiderman. He resigned earlier this year when it came out that he had abused several women. And this was after he came out so strongly against other men accused of the same thing. To me it demonstrates hypocrisy and abuse of power.

Schneiderman followed in Spitzer’s footsteps in leveraging the Martin Act against numerous corporations to generate multi-billion dollar settlements.

R&I: Starr, however, continues to thrive. You said you’re at 3,500 people and still growing. As you continue to expand, how do you deal with the challenge of attracting talent?

Hank Greenberg: We did something last week.

On September 16th, St. John’s University announced the largest gift in its 148-year history. The Starr Foundation donated $15 million to the school, establishing the Maurice R. Greenberg Leadership Initiative at St. John’s School of Risk Management, Insurance and Actuarial Science.

Hank Greenberg: We have recruited from St. John’s for many, many years. These are young people who want to be in the insurance industry. They don’t get into it by accident. They study to become proficient in this and we have recruited some very qualified individuals from that school. But we also recruit from many other universities. On the investment side, outside of the insurance industry, we also recruit from Wall Street.

R&I: We’re very interested in how you and other leaders in this industry view technology and how they’re going to use it.

Hank Greenberg: I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.

R&I: So as the pre-eminent leader of the insurance industry, what do you see in terms of where insurance is now and where it’s going?

Hank Greenberg: The country and the world will always need insurance. That doesn’t mean that what we have today is what we’re going to have 25 years from now.

How quickly the change comes and how far it will go will depend on individual companies and individual countries. Some will be more brave than others. But change will take place, there is no doubt about it.


More will go on in space, there is no question about that. We’re involved in it right now as an insurance company, and it will get broader.

One of the things you have to worry about is it’s now a nuclear world. It’s a more dangerous world. And again, we have to find some way to deal with that.

So, change is inevitable. You need people who can deal with change.

R&I:  Is there anything else, Mr. Greenberg, you want to comment on?

Hank Greenberg: I think I’ve covered it. &

The R&I Editorial Team can be reached at [email protected]