Price Transparency for Doctors

By May 3, 2017Commentary

There has been much interest in getting consumers good comparative price information, especially their actual out-of-pocket cost, so that they can be “good” shoppers for health care.  Similarly, there has been interest in ensuring that doctors know what the services they are ordering may cost, in the hopes they may think twice before ordering a marginally appropriate treatment or diagnostic.  A study in the Journal of the American Medical Association Internal Medicine dashes these hopes, at least in regard to ordering of inpatient lab tests.   (JAMA Int. Med. Article)   The intervention involved 3 hospitals in Philadelphia with a one-year pre-intervention and one-year post intervention study period that covered over 98,000 patients and about 143,000 admissions.  The intervention involved displaying Medicare allowable fees for laboratory tests.  The display occurred randomly across tests and allowed comparison of ordering behavior when fee information was and wasn’t available.  The primary outcome was the number of tests ordered and other outcomes included lab costs and actual tests performed.

In looking at test ordering for the intervention group compared to the pre-intervention one, the researchers found that there was no difference in overall test ordering, about .5 tests per patient per day or in laboratory costs per patient day.  In subset analyses, there was a small decrease in ordering for patients in the ICU and a small increase for patients not in the ICU.  On an adjusted basis, there actually was a slight overall increase in test ordering during the intervention.  The authors conclude that displaying fees made no difference in ordering behavior.  This may suggest doctors don’t care about the cost of services they order or that they render a medical judgment about what to do for patients without taking costs into account.  It also could be that since fees for lab tests aren’t that high on an absolute basis, especially Medicare allowable fees, the doctors may actually have felt freer to order tests by perceiving that the costs weren’t high.

Kevin Roche

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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