How to Save Billions in Healthcare Without Even Trying

showmethecostsHPpicWith the roll out of Affordable Health Care, increasing attention has been focused on the dramatic rise in health care costs. In addition to being a necessity for all Americans, health care is an important economic transaction we all engage in on a regular basis.

During this holiday season, I asked some patients about their on-line and in-store purchasing habits, and the process by which they choose what to put in their “shopping cart.” While need, want and quality are important, not surprisingly, the primary determinant is price.

When asked if they would put products in their “shopping cart”  while shopping online without any attention to price, their reaction is “of course not, that would be crazy.” Of course, if price wasn’t shown (and appeared to be free) they would load it up their “cart.”

When I then asked if they knew who “orders” their healthcare and puts it in their “shopping cart,” most are stumped by the question, as it is rarely framed in these terms. They often make the mistake of thinking it’s the payer (insurance, Medicare) or the recipient (themselves). In reality, it’s we, the physicians, who order their healthcare, place it in their “shopping cart” and then expect it to be paid by a “third party ,” unconcerned and unaware of the cost. And herein lies both part of the origins of the accelerating healthcare cost crisis and a possible solution.

The true import of this was brought home to me by a patient, who I recently saw after she had a 3rd opinion with a noted specialist for a rare condition. Initially, she had in-office diagnostic testing (negative for condition) followed by a large number of blood tests, mostly duplicates of previous recent testing to assess the causes of the condition that we had already established she didn’t have — the price tag: close to $20,000.

When told she might be responsible for the charges, about 60% of her annual income, she decided to file for personal bankruptcy… despite having insurance.

In another recent example, an older patient who didn’t have health insurance was seen by a colleague for a routine visit. Simple blood tests were ordered, which ended up costing over  $800. These tests would not have been ordered for a patient, who without insurance or Medicare to contract a lower fee, would be 100% responsible, if the costs had been available upfront.

A recent commentary in the New England Journal of Medicine, “Full Disclosure — Out-of-Pocket Costs as Side Effects,” described the importance of discussing not only the risks and benefits of what we recommend for patients, but “The undisclosed toxicity? High cost, which can cause considerable financial strain” — clearly illustrated by the above examples.

But, I believe, the authors have missed a central problem in their commentary. Unlike every other aspect of the American economy, the cost of testing is invisible to the doctors who order it. In fact, this has always been the case, in the misguided belief that they should not allow cost to dictate the care of their patients. And physicians have traditionally accepted this as simply  “the way it is.”

With the explosion of increasingly sophisticated laboratory tests and complex radiologic screening procedures, a simple click of a box can increase patient costs by thousands of dollars. There is no price listed for any item ordered, akin to getting a menu in a restaurant with no prices on it.  A chivalrous practice in some restaurant circles, reserved for women’s menus, to shield a woman so she could order without being inhibited by price sensitivity.

While the price that is actually paid varies, as it is discounted by insurance or Medicare, the full price should be listed, as this is often what an uninsured patient will be billed.

Physicians often overestimate the cost of inexpensive tests and medications and also dramatically underestimate the cost of expensive tests. What has become clear through a simple perusal of patient EMR (electronic medical records) has been the substantial increase in duplicative, frequently unnecessary testing. And this has become “the standard of care” rather than the exception.

Why? Some would say concerns about malpractice, and this is not to be taken lightly. However, I believe it is simply habitual behavior and the desire to be “thorough.” Patients often evaluate the quality of their care by the perceived “thoroughness” of the blood work ordered, praising their physician and therein reinforcing this conduct. Both may be unaware that repetitive testing or extensive rather than simple screening tests are not necessarily better, and may, in fact, be poor substitutes for good clinical judgment that could be accomplished by a timely history or exam.

Most patients don’t realize that their physician doesn’t know the price of the tests they order and receives no payment related to the tests (unless it is their in-office lab). There appears to be a deep-seeded public fear that unless no stone is left unturned, something crucial might be missed. Further, if they are told that for cost reasons that they cannot have a certain test, it fuels this fear. Guaranteeing our patients that they won’t ever get sick, that we will catch everything early no matter the cost, propagates this fear and an individual’s desire for immortality. Most of this is myth and costly beyond belief.

The advent of EMR should have mitigated some of this testing duplication. EMR delineates not only what has been ordered but also if the tests bore negative results. Despite this, tests are continually repeated. Of even greater concern, EMR makes it easier to order tests with a simple “click.” And, even though EMR provides a way to show the price, it’s still absent.

What seems clear is that if physicians were aware of the cost each time they “click“ a test in an order, they would have a opportunity to reflect on whether that cost is justified by need. Without cost transparency, there can be no discussion with a patient about the cost of care, therein making them part of the decision.

Please overhaul the system and show us the cost so we can understand our role in the accelerating cost of health care! And for physicians who need further incentive, they should note that this problem has contributed to the marked increase in healthcare costs over the last 20 years and the decline in their income! This is Economics 101. With healthcare looking to limit costs, there has been an overall reduction in reimbursements to doctors for patient visits as the cost of services, many of questionable necessity, eats up the money.

We could save billions in healthcare dollars yearly through this simple and obvious approach. This may also serve to put downward pressure on the often exorbitant costs once they come to light. That is the heart of real capitalism.

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