Geographic variation in health spending has attracted enormous attention and has been hypothesized to be due to a variety of causes. At its heart, it may simply reflect different physician treatment preferences. A new study at the National Bureau of Economic Research looks at the role physician training may play in practice variation. (NBER Paper) Why do physicians, who have the capability to direct most medical care, differ in the diagnostics and treatments that they order? Is it because of differences in internal beliefs and attitudes about factors like responding to what patients say they want or how aggressively diseases should be treated? Is it because of genuinely differing beliefs about the relative efficacy of the frequency or type of treatments? Is it due to training in medical school or residencies? Is it peer pressure from other physicians in the same practice or in the community? The authors in the NBER paper focus on physicians in training and on the role of informational uncertainty. They looked at effects within intern/resident teams and in specialty practice versus general medicine. They measured a number of utilization and spending variables, but test ordering was the key one, because it tends to be more discretionary.
A few of the interesting findings include that training with relatively high-spending supervising physicians does not seem correlated with higher spending when the trained physician is later working on their own. Specialist spending patterns seem to converge during training and limit variability, but general medicine ones do not and variability remains. The authors attribute this to the fact that there is more knowledge and information certainty for specialty treatment and there is a learning effect toward best practices. Interns show less cost variability than do residents, indicating that somehow doctors pick up more variability to their treatment approaches as they are trained. And even for diseases where care guidelines are available and strongly reinforced, they are often not accepted and followed. In training institutions, a team approach is often being used for treatment and there are obviously effects of interaction of team members and information transfer. Medicine is a field still full of uncertainty, that is, information about a patient’s condition and what will best treat it is often unknown. This uncertainty is itself a fertile opportunity for practice variation; a variation that is not necessarily bad. And while different physicians may draw different conclusions on the information available to them, in a team setting they will also be influenced by and will influence other team members as the decision-making process proceeds. When you consider all this complexity in process and uncertainty in information, it is not surprising that there is substantial variation in physician treatment decisions, differences which are then reflected in utilization and spending variation.