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When Physicians See Costs, They Act Like Consumers

John Commins, for HealthLeaders Media, April 16, 2013

Feldman is the lead author of a new online study published this week in JAMA Internal Medicine that found that when doctors are told the price of some diagnostic laboratory test as the tests are ordered, they respond like informed consumers and either order fewer tests or shop around for cheaper alternatives.

"One of the best ways to make sure we are doing the best by our patients is to order the tests that actually needs to be ordered for that patient and to remember that there is a cost to every test that we order," Feldman says.

The Johns Hopkins study identified 62 diagnostic blood tests frequently ordered for patients at The Johns Hopkins Hospital. Researchers divided the tests into two groups and made sure prices were attached to one group from November 2009 to May 2010 at the time doctors ordered the lab tests.

They left out the pricing information for the other group over the same time period. When the researchers compared ordering rates to a six-month period a year earlier when no costs were displayed, they found a nearly 9% reduction in tests when the cost was revealed as well as a 6% increase in tests when no price was given. The net charge reduction was more than $400,000 over six months.

Researchers were surprised to find that the biggest savings came when doctors changed ordering patterns for basic and relatively inexpensive tests that are ordered thousands of times, rather than from costlier tests.

"We thought if we were able to decrease these expensive tests we will make a difference," Feldman says. "It turns out that those expensive tests aren't ordered often enough that decreasing the number ordered by a good percentage… doesn't actually save money."

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2 comments on "When Physicians See Costs, They Act Like Consumers"


Tubor Rathke (4/16/2013 at 1:26 PM)
The public has been bamboozled into believing that doctors order extra tests, driving up the cost of healthcare, because they fear malpractice lawsuits. Here is proof that doctors do extra testing because it's faster, more accurate, and easier than trying to diagnosis using a physical exam alone and that, when they don't have to worry about costs, they don't worry about costs.

flpoggio (4/16/2013 at 10:33 AM)
Nothing new here. This study has been done a thousand times. When I was the CFO at Univ of Wisconsin in 1977 we did this very same project, and got the same results. But here's what we learned afer six months. The test order volumes fall off for about three months, then the docs get conditioned to it, rationalize why the tests are necessary, and in about 6 months the volume is back where it was. One way they rationalize it is saying "hey, the patient isn't paying for it, the einsurance company is or Medicare, so it's little or no cost to the patient". The only real change that happens that sticks is when the doc has some skin in the game, ala Mayo (or ACO).