Can survey data be used to estimate physician practice costs?

Health policy makers rely on survey estimates of physician practice costs to set reimbursement rates. The Health Core Financing Administration has just funded a multimillion dollar effort to collect survey data that will be used to revise payments under the Medicare Fee Schedule However the ability of large-scale physician surveys to obtain accurate information about practice costs is not apparent. This article examines several of the key obstacles encountered when trying to obtain accurate estimates. Rates of both unit and item nonresponse over time are described; in general there is a trend toward lower unit response rates and higher item response rates The article also examines logical inconsistencies in data The results suggest that physician surveys may not be the most appropriate source of data about physician practice expenses. Health policy makers concerned about provider reimbursement issues should seriously scrutinize the accuracy of results from physician practice cost surveys. This article concludes by suggesting alternative methodologies for incorporating physician practice costs into reimbursement rates.