Cost-Consciousness in Health Care

When doctors and other providers know the costs of care, they will curb expenses when caring for patients.

Physicians often order laboratory tests and imaging studies without any idea about the costs incurred on behalf of the patient. Research has begun to show that as clinicians become aware of costs, the overall amount of testing declines.

The most recent study adds to this body of evidence. Researchers at the Johns Hopkins Hospital selected the 35 most common lab tests performed as well as the 35 most expensive lab tests and then randomly assigned some of these tests to display the cost at the time of computerized physician order entry. A baseline period occurring one year prior to the intervention served as a historical control.

The main outcomes of interest were the total number of orders placed, the frequency of orders (per patient-day), and the total charges associated with those orders. Hospital services explored in this study included medicine, surgery, intensive care, neurology, obstetrics and gynecology, psychiatry, pediatrics, and the emergency department. Over 75% of orders came from either the medicine wards or intensive care units.

During the course of the study, the number of orders placed among tests assigned to the intervention (i.e. the group where cost was displayed) decreased by 9.1%. On the contrary, tests in the control  (i.e. costs not displayed) increased by 5.1%. Similarly, charges decreased among the intervention by $3.79 per patient-day whereas costs increased by $0.52  per patient-day when ordering providers remained blinded to cost. The total fees associated with blood tests decreased by over 10% when providers were aware of the cots. When providers were unaware of costs, a gradual increase of 2.4% occurred.

The researchers noted that no direct or indirect incentives were provided to the clinicians involved in this study, thus the simple act of displaying the cost of a lab test on the order entry screen was enough to significantly alter behavior in a cost-conscious manner.

Commentary

This study mirrors a 2011 surgical study that reported significant cost savings for daily blood tests simply by alerting doctors to the cost of the tests that they wished to order.

The magnitude of the cost savings from the surgical study was nearly 27% whereas for this study (which covered tests across almost all areas of the hospital) savings approximated 10%. If the true value of cost-consciousness lies anywhere in between these two point estimates, significant savings can be achieved in health care.

Based on the above findings, this study suggests that all electronic health records should implement a mechanism to inform ordering providers of the costs of the most commonly performed blood tests. If that is not immediately possible, it would be a reasonable alternative for clinicians to educate themselves to the costs of the tests they order.

At a minimum, training programs and medical schools ought to educate their enrollees about these costs so that future generations of health care providers can begin to stem the tide of rising health care costs.

It would be interesting to see if the same trends bear out when providers are informed of the cost of expensive procedures and surgeries.

Feldman, LS, et al. JAMA Intern Med. 2013; 173 (10): 903-908.

by

Cedric Dark, MD, MPH