Composite Measures of Health Care Provider Performance: A Description of Approaches

Policy Points: Composite measures of health care provider performance aggregate individual performance measures into an overall score, thus providing a useful summary of performance. Numerous federal, state, and private organizations are adopting composite measures for provider profiling and pay‐for‐performance programs. This article makes an important contribution to the literature by highlighting the advantages and disadvantages of different approaches to creating composite measures and also by summarizing key issues related to the use of the various methods. Composite measures are a useful complement to individual measures when profiling and creating incentives for improvement, but because of the sensitivity of results to the methods used to create composite measures, careful analysis is necessary before they are implemented. Context Since the Institute of Medicine's 2001 report Crossing the Quality Chasm , there has been a rapid proliferation of quality measures used in quality‐monitoring, provider‐profiling, and pay‐for‐performance (P4P) programs. Although individual performance measures are useful for identifying specific processes and outcomes for improvement and tracking progress, they do not easily provide an accessible overview of performance. Composite measures aggregate individual performance measures into a summary score. By reducing the amount of data that must be processed, they facilitate (1) benchmarking of an organization's performance, encouraging quality improvement initiatives to match performance against high‐performing organizations, and (2) profiling and P4P programs based on an organization's overall performance. Methods We describe different approaches to creating composite measures, discuss their advantages and disadvantages, and provide examples of their use. Findings The major issues in creating composite measures are (1) whether to aggregate measures at the patient level through all‐or‐none approaches or the facility level, using one of the several possible weighting schemes; (2) when combining measures on different scales, how to rescale measures (using z scores, range percentages, ranks, or 5‐star categorizations); and (3) whether to use shrinkage estimators, which increase precision by smoothing rates from smaller facilities but also decrease transparency. Conclusions Because provider rankings and rewards under P4P programs may be sensitive to both context and the data, careful analysis is warranted before deciding to implement a particular method. A better understanding of both when and where to use composite measures and the incentives created by composite measures are likely to be important areas of research as the use of composite measures grows.