Physician Beliefs and Variation in Health Spending

Untangling regional variation in health spending is difficult, as shown by the multiple reports on the subject.  And variation appears to occur almost at the patient or physician level, not necessarily at larger geographic areas.  A paper published by the National Bureau of Economic Research focuses on the possible role of patient or physician preferences or beliefs about treatment.   (NBER Paper)   The authors used surveys of Medicare recipients and physicians who treat Medicare patients (remember that variation in Medicare and commercial spending can be different in the same locale) linked to data about utilization of services.  The beneficiaries were asked about their preferences in regard to certain scenarios of aggressive versus palliative care.  The physicians, separated into primary care doctors and cardiologists, were given four situations involving elderly patients and asked how they would treat the patients.  Remembering that this is self-reported survey data, and self-reported data about beliefs, which can differ significantly from actual actions, the researchers found that patient preferences appeared to play an insignificant role in spending variation, although many patients expressed a preference for marginally necessary care, but that physician preferences appeared to be a major factor.  In regard to these physician preferences, they did not appear strongly linked to malpractice concerns or other financial concerns, although we doubt many physicians would admit to providing more services to make more income, but they did appear somewhat correlated with meeting expectations of either patients or referring doctors.  The strongest correlation, however, was with physician beliefs about the effectiveness of certain therapies, which can derive from either training or personal experience.  Physicians showed significant variability in their beliefs about the efficacy of treatment options in the scenarios they were presented.   Continued research on comparative effectiveness might be valuable in limiting treatment differences based on inaccurate beliefs about efficacy.  The researchers estimate that as much as 36% of Medicare end-of-life spending and 18% of overall Medicare spending may be due to these physician beliefs that often are not consistent with the best evidence or care guidelines.  Although there are significant limitations in the research methodology, it appears to provide a reasonable possible explanation for some of the variation in spending.