• When doctors learn the cost of care, what happens?

    A study published in 1990 describes how alerting doctors precisely at the time of service of the cost of medical tests resulted in a 17% decline in test ordering.   The researchers who conducted the study believe that cost information needs to be right in the face of the doctor, at the moment she or he is to order a test, to have an impact.

    I wholeheartedly agree with the premise that when doctors are aware of the costs of services, it does influence the decision making process as to whether a patient should or should not have services.

    I also believe that physicians are influenced by insurance coverage of their patients.  If the physician is aware that the patient has robust coverage, that physician is more likely to order the prescribed level of care.  If the physician is aware that the patient has no coverage or partial coverage, they recommend a less costly form of treatment.

    In conclusion, it is important for physicians to know the cost of services because healthcare services are very expensive and sometimes patients do better with more conservative forms of treatment.  More expensive care often times does not lead to better outcomes.

    This study was carried out in the General Medicine Practice of the Regenstrief Health Center in Indianapolis. The center is the primary outpatient facility for Wishard Memorial Hospital, an urban general hospital.  All 125 physicians who were part of the General Medicine Practice in January 1988 participated in the study.

    Physicians in both intervention and control groups entered all their orders for tests through computer workstations. During intervention sessions, however, when a physician had completed ordering a test, the computer opened a “window” on the screen and displayed the charge the patient (or the insurer) would pay for the current test and the total charges for all tests ordered for that patient on that day.

    The physician was then given the option of pressing the “C” key to cancel the test or any other key to eliminate the message and continue with test ordering. Physicians in the control group could also cancel individual tests by pressing a particular function key, and any physician could press the “escape” key and cancel all tests ordered for that patient on that day.

    Before the beginning of the intervention period, the research team informed all physicians that it would be carrying out a study of the ordering of outpatient tests. No other information about the study was given to any physician.

    The researchers assessed patients’ clinical outcomes by extracting from their computer records information on all hospitalizations, emergency room visits, and outpatient visits for a 52-week period that included the 26-week intervention period and the following 26 weeks.

    The researchers had assumed that the physicians in the study were ignorant of the charges for tests and that the intervention would reduce their ignorance. A pre-intervention survey confirmed the first assumption, as have other studies. In this  study the physicians’ estimates were off by an average of more than 40 percent.

    Eighty percent of all visits during the intervention period were scheduled; during these visits the physicians in the intervention group ordered 16.8% fewer tests than those in the control group, which resulted in 15.3% ($8.17 per visit) lower charges for outpatient tests. For unscheduled visits, the physicians in the intervention group ordered 11.4% fewer tests, resulting in 9.7% ($3.78 per visit) lower charges .

    Thanks to Martha Bebinger, who posted 9 3 11 on Healthcare Savvy about this study.

    The study:  William M. Tierney, M.D., Michael E. Miller, Ph.D., and Clement J. McDonald, M.D., The Effect on Test Ordering of Informing Physicians of the Charges for Outpatient Diagnostic Tests.  N Engl J Med 1990; 322:1499-1504May 24, 1990


    0 comment September 29, 2011

  • Kaiser Foundation survey of health plans, 2011

    Its annual Employer Health Benefits Survey is just out.  Key findings tend to conform to those of other surveys.

    Premiums in 2011 for single and family coverage in 2011 are $5,429  and $15,073, respectively, amounting to 8% and 9% increases over 2010.

    Premiums increased significantly faster than workers’ wages (2.1%) and general inflation (3.2%).  Since 2001, family premiums have increased 113%, compared with 34% for workers’ wages and 27% for inflation.

    Workers contribute 18% (single) and 28% (family) of premium costs, shares which were unchanged from 2010.  In dollars, that amounts to $921 and $4,129.

    The average deductible for a single enrollee in a PPO plan is $675; for a high deductible health plan (HDHP) with a savings option, $1,908.

    The rise of HDHPs is steep.  The share of employers offering HDHPs rose to 23% from 15% in 2010. 17% of workers are enrolled in a HDHP, up from 13% in 2010 and 8% in 2009.

    Just looking at single person plan deductibles of at least $1,000, the percentage of single coverage workers with at least this deductible rose from 10% in 2006 to 31% in 2011.  Twelve percent of single coverage workers had deductibles of at least $2,000.

    0 comment September 27, 2011