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Low Cost Doctors Save Patients $26 per Visit

Price transparency is set to take off. But focus should be on big systems, not doctors. (Volume 9, Issue 27)

In the increasingly competitive market that defines the nation’s health care system, a recent study examined how price transparency for the cost of outpatient physician office visits could potentially lower rising health care costs. The study found significant price variation between primary care physicians based on the price of a middle-complexity established outpatient office visit. A 10% difference in pricing, or roughly $26, was noted between the low- and high-priced primary care physicians.  Patients treated by the low-priced primary care physician group were also noted to have roughly 3% reduction in overall spending and 5% reduction in outpatient spending compared to the high-priced physician group.

Source: Ilmicrofono Oggiono (Flickr/CC)

Looking at total spending for patients and the health insurer, low-priced primary care physician groups saved patients $162. Although relatively small, these savings could lead to for physician services.

Although some proponents of using price transparency in health care may view these findings favorably, this study neglects several issues. First, the study focuses heavily on physicians’ roles and their services. However, most primary care physicians are now employees of large health care systems and do not set their own prices. Additionally, other outpatient services will be accrued within the same health care system. With rapidly consolidating services, competition for less expensive care will not be possible in areas with an effective health care monopoly.

Second, primary care physicians are subject to multiple forces dictating their every move. Between policies set by health care systems, limited treatment options covered by health insurers, and excessive and often unnecessary demands from patients (e.g. over-testing and over-treating), physicians have become pawns in a healthcare game when they once were one of the players.

Most patients typically pick their primary care physician based on location, reputation, and familiarity. Is $26 enough to encourage price shopping? And once the out-of-pocket deductible has been reached, patients will no longer have a direct reminder about the cost of their health care choices. While there certainly will be a focus on transparency for physician services, I suggest more attention be made on monitoring costs attributable to hospitals and large health care systems.

commentary by Tyree Winters

Abstract

Price transparency initiatives encourage patients to save money by choosing physicians with a relatively low price per office visit. Given that the price of such visits represents a small fraction of total spending, the extent of the savings from choosing such physicians has not been clear. Using a national sample of commercial claims data, we compared the care received by patients of high- and low-price primary care physicians. The median price for an established patient’s office visit was $60 among low-price physicians and $86 among high-price physicians (price was calculated as reimbursement plus out-of-pocket spending). Patients of low-price physicians also received, on average, relatively low-price lab tests, imaging, and other procedures. Total spending per year among patients cared for by low-price physicians was $690 less than spending among patients cared for by high-price physicians. There were no consistent differences in patients’ use of services between high- and low-price physicians. Despite modest differences in physicians’ office visit prices, patients of low-price physicians had substantively lower overall spending, compared to patients of high-price physicians.

PMID: 27920322 Mehrotra, A, et al. Health Affairs. 2016; 35(12): 2319-2326.

Tyree Winters, DO
About Tyree Winters, DO

Lead Analyst – Continuity of Care & The Workforce Dr. Winters has contributed to Policy Prescriptions® since 2010. He received a Bachelor of Arts in Psychology from University of Michigan-Dearborn and completed his medical education at Ohio University College of Osteopathic Medicine. Dr. Winters completed a pediatric residency from Nationwide Children’s Hospital/Ohio State University Medical Center/Doctors West Hospital and is board certified in Pediatrics. He currently is an associate professor of pediatrics at the Ohio State University College of Medicine. Dr. Winters originally hails from Detroit, MI. Contact: Facebook | Twitter | More Posts