Last few weeks brought us a string of new reports about success (or lack thereof) of physician rating services, consumer attitudes towards the concept and reactions of the government and the industry.

Quite a while ago I wrote that physician review sites are here to stay despite concerns. That held true and in fact we had a real explosion of them emerging (31 according to VentureBeat). But we are also starting to get an idea of the effect they will have on the system and their staying power (or lack thereof).

So what is going on and what is the problem?

Well, the problems seem to be everywhere we look. My long-ago post said the then-available services are garbage. A year-and-a-half later not much has changed. But now we have proof that consumers see these ratings the same way. A recent CNN poll found that a whopping 82% of consumers "do not trust online reviews of doctors". A companion article gives a few tips on how to make sense of all that stuff about doctors we find online.

The problem with these ratings is in arbitrary rating critiria

No matter who designs these services and how, the rating systems remain arbitrary. This might be fine for movies and restaurants where the price for error is slim, but is drastically different with doctors who have reputations and careers on the line. Predictably they are not pleased at all and rightly view the raters as unwelcome encroachment on their professional standing. Here is a representative quote from a recent piece in Medical Economics.

Some physicians have questioned the validity of being rated online by patients, and the reaction to Angie’s List is no different. “The concept is good, but how do you determine if the info—both good and bad—is accurate?” asks FP Fred Porcase in Jacksonville, FL. FP Beth Pector in Naperville, IL, notes that many of the questions posed by Angie’s List don’t have anything to do with medical care. “When doctor evaluation is reduced to a popularity contest, we're no longer professionals and are just another service commodity,” says Pector.

Of course every rating site has its own answer to how to "ensure quality", but the fact remains that on the Internet nobody (usually) knows you are a dog and opinions run wild. That is good for entertainment, but bad for making life-critical decisions. Nonetheless some forward-thinking doctors recognize that while the ratings are useless and unfair they will push the healthcare industry towards doing the right thing. More from Medical Economics:

Other doctors, however, view Angie’s List as a wake-up call for their profession to improve customer service. “When physicians ceded control of the medicine they practice to insurance companies, medicine—at least primary care— was reduced to below the level of auto mechanics,” says Denver FP Jonathan Sheldon, a cash-only doctor operating outside the insurance realm. “My mechanic returns my calls, schedules realistically, and takes responsibility for every aspect of the experience I have at his shop.”

The "service problem" in healthcare is real and will not just disappear

On the hospital side, a recent survey by Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) found the level of patient-satisfaction to be "grim", as characterized by Modern Healthcare piece. Here are a handful of highlights:

• 67% of patients said they would definitely recommend their hospital to friends and family
• 63% gave their hospitals an overall rating of 9 or 10 on a 10-point scale,
• 54% of patients said the room was "always" quiet at night
• 79% of patients said their physicians "always communicated well."

The survey and its methodology sparked a lively debate in letters section of Modern Healthcare with comments like this one:

For people who seem to be satisfied with 67% patient satisfaction, I would suggest that this point of view represents a core problem with our industry, and the reason patient safety, while improving, is still frighteningly below an acceptable level. What is unduly alarming is not the reporting, but our willingness to accept something less than the best. If 67% patient satisfaction is acceptable, what is the number for patient safety—how many preventable mistakes or never events will we accept?

So I think despite low quality of online ratings they (along with more trustworthy data) are increasing pressure on the system to improve service. In fact this is pushing the industry towards something unheard of: doctors and insurers calling a truce over how to rate doctors. According to NYT report:

“There has been a hodgepodge of measures that patients don’t know if they can rely on and doctors certainly don’t trust,” said Peter V. Lee, the executive director for health policy of the Pacific Business Group on Health, a San Francisco-based association of employers that offer health coverage, which helped push for the agreement.

The agreement to develop a national set of standards represents a significant compromise between major physician groups, including the American Medical Association and the American College of Surgeons, and the nation’s health insurers, including Aetna and UnitedHealth. The pact has also been endorsed by the insurance trade group, America’s Health Insurance Plans. Insurers say they will abide by these standards and rank doctors on the basis of both the cost and quality of care they provide to their patients.

Besides agreeing to various standards for grading physicians, the insurers say they will allow independent parties to review their rankings.

Now what does all this have to do with "crowd psychology"?

First of all, the idea of using online reviews by random people to "find truth that will set you free" has been based on the concept of the Wisdom of the Crowd. The term gets tossed around a lot, but few people realize that it is a derivative of the earlier term: Madness of the Crowd, that was coined by Charles Mackay to describe financial manias and panics. Oftentimes, the crowds' actions converge producing useful results. In other times you end up with irrational outcomes. IMHO, the following quote speaks for itself and requires no further comment:

"Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one!"

- Charles Mackay

Why do we have 31 doctor rating services physicians hate and consumers do not trust? Easy, the madness of the Health 2.0 crowd.

So many people got carried away with the idea that "Web 2.0 will change healthcare" that they are failing to ask basic questions of if, how and why it would (or would not) work. Make no mistake, the same dot-com mindset is back in full force and as in those old times we see people copying the same bad ideas from one another. Unlike the last time, the IPO/M&A markets are not here to bail out the companies without a feasible way of making money. Nowhere is this more apparent than in physician reviews market. But other sectors, for example PHR are not far behind.

If you make decisions for a real-world healthcare company all I can say the change is coming, but buyer beware!

UPDATE: Scott Hensley highlights this post on WSJ Health Blog.