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This technical report explains the relationship between reliability measurement and misclassification for physician quality and cost measures in health care. It provides details and a practical method to calculate reliability and misclassification from the data typically available to health plans. This report builds on other RAND work on reliability and misclassification and has two main goals. First, it can serve as a tutorial for measuring reliability and misclassification. Second, it will describe the likelihood of misclassification in a situation not addressed in our prior work in which physicians are categorized using statistical testing. For any newly proposed system, the methods presented here should enable an evaluator to calculate the reliabilities and, consequently, the misclassification probabilities. It is our hope that knowing these misclassification probabilities will increase transparency about profiling methods and stimulate an informed debate about the costs and benefits of alternative profiling systems. The appendixes provide more technical detail on how to measure reliability with related program code as well as a set of lookup tables that can be used to obtain the rate of misclassification associated with a reliability estimate under various scenarios.

This work was sponsored by the American Medical Association and the Massachusetts Medical Society. The research was conducted in RAND Health, a division of the RAND Corporation.

This report is part of the RAND Corporation technical report series. RAND technical reports may include research findings on a specific topic that is limited in scope or intended for a narrow audience; present discussions of the methodology employed in research; provide literature reviews, survey instruments, modeling exercises, guidelines for practitioners and research professionals, and supporting documentation; or deliver preliminary findings. All RAND reports undergo rigorous peer review to ensure that they meet high standards for research quality and objectivity.

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