Physician Consideration of Patients’ Out-of-Pocket Costs in Making Common Clinical Decisions
By Hoangmai H. Pham, MD, MPH; G. Caleb Alexander, MD, MS; Ann S. O’Malley, MD, MPH
Archives of Internal Medicine
April 9, 2007
As insurers and employers seek to control health care spending in the post-managed care era, patient cost sharing is likely to remain a prominent tool for influencing health care utilization. How well this works depends in part on physicians’ sensitivity to their patients’ OP costs, because physicians are responsible for decisions that affect how 90% of each health care dollar is spent. We found that while most physicians reported routinely considering patients’ OP costs in clinically straightforward prescribing decisions, only half or fewer do so in more complex situations that allow greater clinical discretion.
Our survey was conducted in 2004-2005, several years after employers and insurers embarked on the current trend of “benefits buy-down” through expanding consumer copayments and deductibles. We found that, despite the attendant increases in cost-sharing burdens over that time period, most physicians did not take them into account when making common care recommendations surrounding diagnostic testing and choosing care settings.
To our knowledge, prior studies have not compared physicians’ sensitivity to patients’ OP costs for different services. The variation across different types of clinical decisions that we document is not unexpected. The wider clinical latitude involved in more complex decisions means that physicians may prioritize other considerations, such as accuracy of a test or ease of scheduling, above patients’ OP costs as they approach these types of choices. And physicians and patients are less likely to have ready access to detailed cost data for diagnostic tests or care settings than for prescription drugs.
Nevertheless, that physicians report considering patients’ OP costs less frequently in making decisions about more expensive services suggests that cost-sharing arrangements dependent on patients and physicians weighing such costs can have only limited effect on use of such services and, by extension, less impact on overall health care spending than payers might hope for.
We also found that specialists were modestly more resistant to OP costs than primary care physicians. Regardless of the mechanisms, these specialty differences compound concerns that cost sharing will have limited effects on the use of more expensive medical services.
http://archinte.ama-assn.org/cgi/content/full/167/7/663
Center for Studying Health System Change news release:
http://www.hschange.org/CONTENT/927/
Comment:
By Don McCanne, MD
This is yet one more study which demonstrates that attempting to control costs by requiring patients to pay more out-of-pocket when accessing health care has only limited impact on the more complex services which account for most of our health care spending.
Health care cost increases are a concern for all of us. But trying to slow cost increases by assessing financial penalties for accessing beneficial services only worsens the dysfunctional state of our health care system.
Eliminating administrative excesses, negotiating prices and fees, budgeting capital improvements, reinforcing our primary care infrastructure, and modifying incentives for non-beneficial or detrimental high-tech excesses are all methods of controlling costs that actually improve the function of our health care system.
We can improve health care spending, but there’s clearly a right way and a wrong way. Why do we continue to insist on doing it the wrong way?