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Analysis gives Health Grades flunking marks

Published October 16, 2004 at midnight

Online physician profiles promise to be a consumer dream come true. For the cost of an oil change, you can check out your doctor's education, board certification, years of experience and history of state and federal disciplinary sanctions.

Lakewood-based Health Grades built a million-dollar, publicly traded business on selling these profiles.

There's just one problem: Health Grades gets it right just 42 percent of the time, according to a Rocky Mountain News analysis of its physician discipline records.

Or 59 percent of the time, according to the company's own analysis.

The Web site advertises that it will reveal a physician's history of state or federal disciplinary actions - sanctions such as a license suspension and probation, or a state-mandated course of remedial education.

Health Grades correctly matched doctors to their disciplinary actions less than half the time, according to a News analysis, or less than two-thirds of the time, according to the company's own analysis.

By contrast, Health Grades' main competitor - ChoicePoint - gets it right 90 percent of the time, according to a News analysis, and 97 percent of the time by the company's own analysis.

The News didn't look at other metrics, such as how accurately either site captures education, address or gender.

Consumers need to ask a lot of questions before plunking down money for online information, said Trudy Lieberman, director of the Center for Consumer Health Choices at Consumers Union. "What are their motives, who is selling it, how reliable is it and how would you actually use this information in selecting a doctor?" she said. "There's no supreme being overlooking the reliability and accuracy of this information. It's very much caveat emptor."

Health Grades says it never promised that its data was 100 percent accurate. Furthermore, collecting physician disciplinary sanctions is time-consuming and difficult, the company says.

On its Web site, Health Grades advertises that it "painstakingly compiles" disciplinary actions on doctors "from all 49 states that release it."

As many as 900,000 reports are downloaded by clients each month, said Sarah Loughran, an executive vice president of provider relations for Health Grades. Some of those are paid for by consumers, at $7.95 for the first report. Others are given out free as part of deals Health Grades signs with large employers - including the Rocky Mountain News.

Through a partnership with Hewitt Associates, one of the nation's largest employee benefit management firms, Health Grades' data is free to 80 large employers. Some of Health Grades clients include Boeing, Verizon Communications, The Walt Disney Co. and Accenture.

Sales of such reports, along with contracts with employers, sales of nursing home and hospital reports, and media deals, brought the firm revenue of $915,000 in the quarter ended June 30, 2004 - or 26 percent of its quarterly revenue of $3.5 million.

For the six months ended in June, the company earned $824,077, versus a net loss of $711,138 for the comparable six months a year earlier. CEO Kerry Hicks earned $506,000 last year in salary and bonuses and its four other top executives - including Loughran - made between $235,000 and $273,000, according to SEC filings.

The 56-employee, 5-year-old company also rates hospital quality, signs marketing arrangements with hospitals and helps them improve the quality of their data. It recently published a report documenting an astronomical number of annual deaths - 195,000 - due to errors in the U.S. medical system. The report was picked up by The New York Times, USA Today, Newsweek and Reuters.

Slipping through cracks

To assess the accuracy of physician profiles on the Web, the News looked at 440 physicians with histories of disciplinary action. In order to cast a wide net, the News picked physicians in Illinois, Colorado and Florida who had sanctions during the months of January, June and November of 2001, 2002 and 2003. It then matched a list of doctors with disciplinary problems against the ChoicePoint and Health Grades' Web sites.

On the Health Grades Web site, the News found a third of those physicians disciplined by their states had no mention of their past problems. A quarter of the doctors didn't show up at all. Only 42 percent of the time did Health Grades correctly link a doctor and disciplinary record.

"It's a tough job," said Health Grades' Loughran, when shown the numbers. "We're constantly working on it. I would say, if you were to get on the site right now, you'd see something very different from what you have here."

Health Grades' own analysis of the same doctors, done in response to the News' findings, showed:

The firm failed to mention disciplinary sanctions 18 percent of the time.

In 23 percent of the cases, doctors simply weren't in Health Grades' database.

The company accurately matched doctor to discipline 59 percent of the time.

By contrast, Health Grades' chief rival - Alpharetta, Ga.- based ChoicePoint - correctly matched physician to discipline 90 percent of the time, according to a News analysis. ChoicePoint has 20 employees working on their site; Health Grades has six. ChoicePoint's own analysis of the same doctors, done in response to the News' findings, found a correct match 97 percent of the time.

ChoicePoint blamed the difference between its findings and those of the News' on spelling variations and times when doctors recently relocated to a new state. Our results are "somewhere north of 90 percent," said ChoicePoint spokesman Chuck Jones. "We acknowledge that there are flaws and glitches when you're dealing with data, and we're working to overcome that."

Health Grades' Hicks vehemently defended his site. "It should be noted that the issues you have raised do not point to any inaccuracies in Health Grades' reports," Hicks wrote in a letter to the News.

"Health Grades does not represent that its reports contain all possible data, or that the absence of a statement on, for example, sanctions is a representation that the physician has no sanctions."

The News' recent analysis found problems with 17 Colorado physician reports out of a possible universe of 11,000 doctors, he said. "The issues you raised concern slightly more than 1/10th of 1 percent of the physicians rated in Colorado."

Furthermore, there's no standardized reporting system of disciplinary action by states, making data collection "a very difficult, time-consuming and time- sensitive process."

'A potential mine field'

Such errors "obviously have an impact on consumers' ability to make informed choices," said Brian Schilling, a spokesman for the National Committee for Quality Assurance, a nonprofit quality watchdog. "Inaccurate information. Uninformed consumers. Nobody really wins."

Beyond uninformed consumers, doctors might also have reason to worry.

Last fall, Dr. Stephanie Denton received a flurry of phone calls from her patients' parents, accusing her of an outlandish claim: pedophilia.

Their information came from a Health Grades profile of Denton, downloaded from the Internet, that relayed a history of felony sexual battery and assault, according to court documents. The report said the pediatrician's license had been permanently revoked. A month later, Denton sued Health Grades. The report had confused Denton with another Denton in a neighboring state. As a result, the innocent doctor claimed she was emotionally distressed and suffered damage to her professional reputation. The suit was settled for an undisclosed sum, and neither Health Grades nor Denton's lawyer would discuss it.

Doctors care about the accuracy of their profiles, said Dr. Mark Earnest of the University of Colorado Health Sciences Center.

"The Web is both a wonderful tool and a potential mine field, particularly with medical stuff," he said. "Most physicians would be worried that there might be actually negative misinformation that might find its way on there."

Health Grades' physician databank, which went online in early 2003, is meant to empower patients to check and compare physicians' qualifications before visiting them. Empowering consumers with information is a mantra of the "consumer-directed health care" movement, a trend of shifting out-of-pocket health care costs to workers. If employees pay more for health care, employers say, they'll want to exercise, quit smoking and choose the best doctor and hospital.

A 2000 Kaiser Family Foundation survey of consumers showed that when it comes to their doctor, they are most curious about how to prevent being harmed, and want data on malpractice suits and medical errors.

Perhaps the news has sunk in: in 1999, the Institute of Medicine reported that 50,000 to 100,000 people die each year from simple medical errors.

But how can consumers protect themselves from error if the databases they consult are themselves riddled with errors?

Aware of glitches

Health Grades spokeswoman Loughran said the company became aware of problems with its database three months ago, when an article in SmartMoney magazine ranked the firm fourth out of six in identifying disciplinary problems with doctors.

"We said,'Whoa,' " Loughrin recalls. "We put in a very concerted and thorough effort to go back and rematch and look at all those sanctions again."

A former Health Grades employee tells it differently. Paula Reeves said she alerted the company of problems with the database back in September 2003. She says she was fired for bringing these problems to the company's attention.

Allen Dodge, Health Grades chief financial officer, said he couldn't discuss a former employee. "I can certainly say her termination was not for bringing it to our attention."

Reeves said the company was selling 850 reports a day, bringing in $5,000 to $6,000 each day. At the same time, she was receiving 120 to 150 e-mails daily from dissatisfied customers.

"I suggested taking the site down, fixing the data so information matches correctly, and then reintroducing the product," said Reeves in an April letter to the News. " 'Not possible,' according to management. They'd lose too much revenue doing that."

Health Grades said that as a publicly traded company, it could neither confirm nor deny sales figures that were not released in formal SEC filings.

Reeves "may have been handling 120 e-mails a day," responded Health Grades' Loughran, "because that was her job as part of customer service, but she certainly wasn't handling 120 complaints a day."

Susan Miller, who heads the Colorado Board of Medical Examiners, said she doesn't know why anyone would go to any vendor's site when information about Colorado doctors is free - and error-free - on the state's Web site, http://www.dora.state.

"I believe strongly that the information should be easy to obtain for those individuals who find it relevant," she said. "The public should at a minimum be aware that the information exists and is available."

News methodology

To assess the accuracy of physician profiles on the Web, the Rocky Mountain News looked at 440 physicians with histories of disciplinary action. In order to cast a wide net, the News picked physicians in Illinois, Colorado and Florida who had sanctions during January, June and November of 2001, 2002 and 2003. It then matched a list of doctors with disciplinary problems against the HealthPulse and Health Grades' Web sites.

Give your doctor a checkup

How to find out for free whether your doctor has a history of state disciplinary sanctions.

Go to

Scroll to the bottom of the page, and hit the "Search the Automated Licensure Information System Online" button.

In the next page, for search, put "Medical Examiners" then hit the "Go to Search Form" button.

Type in your doctor's last name.

or 303-892-5269

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