Do different case-mix measures affect assessments of provider efficiency? Lessons from the Department of Veterans Affairs

Abstract

Although case-mix adjustment is critical for provider profiling, little is known regarding whether different case-mix measures affect assessments of provider efficiency. We examine whether two case-mix measures, Adjusted Clinical Groups (ACGs) and Diagnostic Cost Groups (DCGs), result in different assessments of efficiency across service networks within the Department of Veterans Affairs (VA). Three profiling indicators examine variation in resource use. Although results from the ACGs and DCGs generally agree on which networks have greater or lesser efficiency than average, assessments of individual network efficiency vary depending upon the case-mix measure used. This suggests that caution should be used so that providers are not misclassified based on reported efficiency.