High-Price Physicians Don’t Deliver Better Quality

By May 15, 2017Commentary

As consumers we all have a bit of a bias to believing that higher priced goods or services are better quality, even though this often is not the case.  The same is often true in health care.  Price transparency and price comparison tools work on the notion that people will shop for lower priced services to save money, but they could have the opposite effect.  Maybe helping people understand that price isn’t correlated with quality in health care will help.  Research in Health Affairs looks at quality differences between low and high-priced physicians.  (HA Article)   Really the only justification clinicians have offered for higher prices is better quality, although we all know the real reason they charge more is a combination of market power and a desire to earn more.  And where there is market power, there often, at least with hospitals, is worse quality because why make the product better when people can’t get it anywhere else.  The authors looked commercial prices for physicians, the actual paid health plan and patient payments, and at quality and utilization data for the same doctors for Medicare fee-for-service beneficiaries.  Quality was measured by patient experience of care and by certain process measures of care.

Physician practices were divided into high price and low price, with about a 35% difference in prices between the two groups.  High-price ones were more likely to be large and have a lower proportion of primary care physicians and to use more IT.  In terms of experience of care, there was no difference between the two groups on three of four measures, with patients at high price practices a little more likely to have their appointment start at the scheduled time. Performance on care coordination and management measures was slightly better on 4 of 6 measures at high-price practices and there was slightly better preventive care on a couple of measures.  Looking at practice size, large ones, which tended to be higher-priced, had worse overall experience of care scores.  The study’s primary finding was that on the vast majority of measures, there was no difference in quality between low and high-priced physicians and those differences that do exist might be more attributable to practice size and ability to afford expensive IT systems.  The supposed enhanced care coordination and management of high-price doctors didn’t result in lower utilization or spending either.  So health care payers and consumers have no reason to use price as a proxy for quality.

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.

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