Study Finds Physicians Are More Cost-Conscious When They Know About Real-Time Alternatives

Technology-enabled hints embedded within the EHR can deliver real-time cost information, which clinicians can then use to select less expensive alternatives for medications and labs.

A new study analyzing how subtle variations in patient care can add up to big differences in the bottom line has found that physicians become better stewards of certain costs when they’re given real-time information about cheaper alternatives during evaluation and treatment.

The physicians involved in the research were presented with technology-driven hints in the EHR, many of which pointed out cheaper alternatives when they were prescribing medicines. The technology was able to track changes in prescribing behavior, which formed the basis for the study findings.

The eight-month study by Birmingham, Alabama-based IllumiCare evaluated 287 physicians identified as hospitalist, internal medicine, or family medicine providers who placed at least 50 orders and cared for at least 15 patients.

The goal was to develop a method to directly measure behaviors that correlate with higher spending and to determine if an effective method exists to intervene on those behaviors in a way that reduces both the behaviors specifically and spending generally.

The study found that when providers are “nudged” to stop wasteful behaviors, their average spend on meds and labs goes down by an amount that exceeds the sum of the specific opportunities identified. It showed that for every $1 decrease in average savings opportunities per provider per patient, the clinician actually saves up to 1.5 times that amount per admission.

"It's amazing that when you sort of activate clinicians to become stewards, what happens is that that ethos begins to blend over to other decisions that they make, which is a beautiful thing," says G.T. LaBorde, chief executive officer at IllumiCare, which develops and markets real-time cost information technology.

The study follows years of work demonstrating that increased spending does not assure better outcomes in healthcare, LaBorde says. One Dartmouth study, he noted, showed that hip replacement costs in Texas are one-third of what they are in New England.

The new study acknowledges that health plans' higher co-pays and deductions now put more of the cost burden directly on patients, who want just enough healthcare to get well and go home, LaBorde says.

As an example, LaBorde cites cases where some physicians treating C. diff prescribe vancomycin, while others prescribe fidaxomicin, not knowing that the latter medication typically is four times the cost of the former.

"It's not like they teach physicians what things cost in medical school, and these costs change all the time," he says.

Ultimately, it’s up to the clinician to prescriibe the most appropriate medication.

"Today they're making those decisions without any knowledge of the relative cost of the choices," LaBorde says. "Our goal is to allow them to know that. But we would never second-guess a provider and say, ‘Hey, why'd you order that expensive drug?"

Companies like IllumiCare develop technology platforms that deliver real-time updates through HL7 feeds, and are often EHR-agnostic. Hospitals license the technology and are then able to tailor the alerts to their own formularies, eliminating hints that would be irrelevant or out of scope.

According to LaBorde, some 95 percent of clinicians using the technology keep it handy while dealing with patient care, and 83 percent actively check for pricing comparisons.

According to the study, the platform offers more than 1,400 opportunities to make less costly clinical decisions without compromising quality in the right clinical context. These opportunities predict 47% of the financial variation, risk-adjusted, in medication and laboratory spend in a patient’s admission.

An earlier study found savings of about $110 per admission, reducing medication, laboratory, and radiology costs by about 14%.

Payers and accountable care organizations are also using the technology to lower the cost of care by identifying providers who consistently use higher-priced alternatives, LaBorde says. And the technology doesn't interfere with other EHR alerts that may favor a more expensive medication, due to concerns such as a drug-drug interaction.

The hints disappear after briefly being displayed, unlike traditional EHR alerts, which may require a physician to type in a reason to dismiss a particular alert, LaBorde says.

The study reinforces the strategy of using technology to help clinicians become more cost-conscious.

"When you look at the clinicians who begin to attack these opportunities, and they begin lowering their wasteful behavior, they actually lower the overall cost of care more than the opportunities that have they've captured," LaBorde says.

This is true in part because the technology typically recommends a cost savings only when confidence in the data approaches 100%, he said. But it opens physicians to consider cases where the confidence in cost savings dips to 70% or 50%, and physicians are able to consider them anyway.