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Analysis

Spending Variation 'Substantial' Between Providers in Same Specialty

By Jack O'Brien  
   September 24, 2019

A report indicates that variation among providers affects spending on "medications, labs and radiology."

Behavioral factors by doctors contribute to significant cost variations, even among the same type of patients, according to an Illumicare report released Tuesday morning.

The analysis of 15 sub-specialty groups with the largest cost variations found that the most significant factor was "what type of spender a patient's provider is," with cardiology and OB/GYN specialists leading the way.

Between the 25th and 75th percentiles, there was a $5,438 variation among pediatric hematology-oncologists, a difference of $3,885 among OB/GYN orders of cesarean sections without complications or comorbidities, and almost a $3,000 difference among OB/GYN orders on vaginal delivery without complicating diagnosis. 

G.T. LaBorde, CEO of IllumiCare, told HealthLeaders that the purpose of the report was to communicate to the broader healthcare market about how much variation exists among doctors taking care of the same group of patients.

"What frustrates so many [healthcare executives] is when they say to a cardiologist, 'Your patients are staying 1.2 days longer,'" LaBorde said. "Telling the cardiologist that isn't insightful to them, it doesn't help them understand the behavior that might be aberrant that leads to a longer length of stay. It only becomes actionable if [CFOs] can get so discreet that they can say, 'Well, in this scenario, you're the only provider that uses this drug,' or 'You tend to order this lab test more frequently than your peers.'" 

"If a CFO can get that discreet, they can get to a point where they start changing behaviors which can change outcomes."

Related: Physician Compensation Rises Across Most Specialties

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The Illumicare report states that it should be "alarming" for health systems to see such substantial cost variations arising from standard medical procedures, which reinforces the need to address the issue with providers.

Ordering medications, lab tests and radiological exams were highlighted as the primary pain points for cost variations within a sub-specialty.

In one example from the report, cardiologists at three separate hospitals were analyzed on the basis of medications ordered for patients.

Thirty-three medications were ordered by cardiologists at all three hospitals, whereas 54 medications were ordered by cardiologists at only one hospital. 

Related: Rising Prices Lead to All-Time High Healthcare Spending

Related: Health Spending Growth to Average 5.5% Annually Through 2027

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.


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