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BACKGROUND Insurance products with incentives for patients to choose physicians classified as offering lower-cost care on the basis of cost-profiling tools are increasingly common. However, no rigorous evaluation has been undertaken to determine whether these tools can accurately distinguish higher-cost physicians from lower-cost physicians. METHODS We aggregated claims data for the years 2004 and 2005 from four health plans in Massachusetts. We used commercial software to construct clinically homogeneous episodes of care (e.g., treatment of diabetes, heart attack, or urinary tract infection), assigned each episode to a physician, and created a summary profile of resource use (i.e., cost) for each physician on the basis of all assigned episodes. We estimated the reliability (signal-to-noise ratio) of each physician’s cost-profile score on a scale of 0 to 1, with 0 indicating that all differences in physicians’ cost profiles are due to a lack of precision in the measure (noise) and 1 indicating that all differences are due to real variation in costs of services (signal). We used the reliability results to estimate the proportion of physicians in each specialty whose cost performance would be classified inaccurately in a two-tiered insurance product in which the physicians with cost profiles in the lowest quartile were labeled as “lower cost.” RESULTS Median reliabilities ranged from 0.05 for vascular surgery to 0.79 for gastroenterology and otolaryngology. Overall, 59% of physicians had cost-profile scores with reliabilities of less than 0.70, a commonly used marker of suboptimal reliability. Using our reliability results, we estimated that 22% of physicians would be misclassified in a two-tiered system. CONCLUSIONS Current methods for profiling physicians with respect to costs of services may produce misleading results.

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This article presents an analytic model for understanding the role of decision makers in bringing about significant policy and institutional changes and in understanding how processes of agenda setting, decision making, and implementation shape the content, timing, and sustainability of reform initiatives. Central to the model is the assertion that policy elites and the policy making process are important determinants of reform. The framework indicates that circumstances surrounding issue formation, the criteria that decision makers use to select among options, and the characteristics of specific policies are analytic categories that explain a considerable amount about reform outcomes. The model is based on cases developed by participants in twelve initiatives to bring about policy and institutional change in a variety of developing countries.The development message of the 1980s is clear: for a large number of countries, little can be accomplished to enhance growth and welfare unless major policy and institutional reforms are undertaken and sustained by developing country governments. The bearers of this message -many development specialists, international aid and lending agencies, development advisors, academic specialists, and industrial country governments -have become increasingly convinced of: 1) the importance of establishing a macro-policy climate to improve economic performance; 2) the need for adjusting sectoral policies to encourage efficiency and responsiveness to market forces; and 3) the imperative to lessen bureaucratic constraints on economic interactions. The debt crisis in Latin America and the food crisis and apparent failure of two decades of development in many African countries, contrasted with the apparent success of a number of Asian countries in achieving and sustaining high rates of growth, have helped focus extensive attention on the issue of appropriate macroeconomic, sectoral, and institutional contexts for development. 1Nevertheless, in the 1980s, the ranks of opposition to reform were full: economic elites supported by existing policies; ethnic, regional, and religious groups favored in allocafive decision making; bureaucrats and bureaucratic agencies wielding regulatory power; policy elites sustained through patronage and clientele networks; military organizations accustomed to spending generous budgets with few questions asked. Moreover, decision makers, even those convinced of the economic need for the reforms, could not escape considering the political wisdom of adopting and pursuing them; in the name of efficiency and development, most changes implied a significant decentraliza-

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