Understanding the Use of Price Information by Physicians

January 2015
By HCFO Staff

Policymakers and health care delivery systems are increasingly looking to price transparency as a promising approach for controlling health care costs.  Much of this attention has focused on effective strategies for providing price and quality information to consumers who may use it to make more cost-conscious decisions about where, how, and when to seek care.  Yet as a recent article in The New York Times explains, health care consumers aren’t the only ones for whom price information may be useful: Doctors also lack basic information about the cost of health care tests and procedures.

Current literature suggests that most physicians do not know how much diagnostic tests cost, but that making price information available to them at the time of test ordering may influence decision-making.  In a study published in 2013, researchers at Johns Hopkins University School of Medicine found a modest reduction in test ordering when physicians were provided with Medicare fee data at the time of order entry.  In his New York Times article, cardiologist Sandeep Jauhar, M.D., recalls how, as a resident, he and his colleagues would routinely order a complete blood count and an electrolyte panel for every patient in their ward on weekends, unaware that an electrolyte panel costs about $100.  Given that most patients don’t need this lab work every day, Jauhar notes that he and his colleagues may have acted differently had price information been available to them.

In a study funded under the Robert Wood Johnson Foundation’s “Understanding the Use and Impact of Price Data in Health Care” solicitation, Alyna Chien, M.D., M.S., Boston Children’s Hospital and Harvard Medical School, is examining the impact of a physician-targeted price transparency program on clinical decision-making.  As part of the study, Chien and colleagues are conducting a randomized controlled trial at a large multispecialty group practice in which physicians receive alternate versions of the same price information at the time of test ordering. This information is delivered via the practice’s electronic health record and is not available to physicians in the control arm.  Following the intervention, the researchers will conduct semi-structured interviews with randomly-selected physicians from each study arm. The goal of the study is to evaluate the impact of the price transparency program on physicians’ test ordering rates, care quality, and use of price information in clinical decision-making and conversations with patients.       

Issues around price transparency will be the focus of an upcoming summit sponsored by the Robert Wood Johnson Foundation.  The Second National Summit on Health Care Price, Cost and Quality Transparency will be held March 16-18 in Washington, DC, with participation also available via webcast.  An agenda, list of keynote speakers, and registration information is available here.