There’s No Magical Savings in Showing Prices to Doctors

The following originally appeared on The Upshot (copyright 2017, The New York Times Company).

Physicians are often unaware of the cost of a test, drug or scan that they order for their patients. If they were better informed, would they make different choices?

Evidence shows that while this idea might make sense in theory, it doesn’t seem to bear out in practice.

recent study published in JAMA Internal Medicine involved almost 100,000 patients, more than 140,000 hospital admissions and a random distribution of laboratory tests. During the electronic ordering process, half the tests were presented to doctors alongside fees. While the cost to the patient might vary, these Medicare-allowable fees were what was reimbursed to the hospital for the test or tests being considered. The other half of the tests were presented without such data.

The researchers suspected that in the group seeing the prices, there would be a decrease in the number of tests ordered each day per patient, and that spending on these tests would go down. This didn’t happen. Over the course of a year, there were no meaningful or consistent changes in ordering by the doctors; revealing the prices didn’t change what they did much at all.

This isn’t the first time a study like this found that showing prices to doctors doesn’t make a difference. Earlier this year, a study published in Pediatricsreported on a similar randomized controlled trial on physicians caring for children. In this case, doctors were randomized to one of three groups. The first group saw the median price of a test when they ordered it. The second saw both the price (often lower) when obtained within the current health care system and outside it. The third group saw no price at all.

Pediatric-focused clinicians showed no effect from price displays. Adult-focused clinicians actually ordered more tests when they saw the prices.

similarly designed study of more than 1,200 clinicians in an accountable care organization published earlier this year also found no effects from telling physicians prices.

Some older studies have found that physicians might alter their behavior on individual tests, but in only five of the 27 they examined. Another found a small, but statistically significant, difference. Unfortunately, this study suffered from asymmetric randomization. Even before the intervention began, the tests chosen for the price-showing group were ordered more than three times as much as those chosen for the control group. More expensive tests appeared in the control group for some reason as well.

Of course, any one study has the potential to be an outlier or subject to limitations that might warrant skepticism. These can be minimized by looking at the body of evidence in systematic reviews.

One was published in 2015, and argued that in the majority of studies, giving physicians price information changes their ordering and prescribing behavior to lower the cost of care. A closer look, though, reveals that most of the studies in this analysis were more than a decade old. Many took place in other countries. And all were published before these latest, and largest, studies I discussed above. Another systematic review that looked at interventions focusing only on drug ordering found similar results, with similar caveats.

I should be clear: We have good reason to want to believe that interventions focusing on giving physicians information about the prices of the things they order should make a difference. In 2007, a systematic review demonstrated that doctors were ignorant of the costs of prescription drugs. They underestimated the prices of expensive drugs, overestimated the prices of inexpensive ones, and did not understand the extent of the difference in price between those considered cheap and those considered pricey. Another, published in 2015, explored 79 studies, 14 of which were randomized controlled trials, that suggested that physicians could be educated to deliver “high-value, cost-conscious care.”

But that education probably needs to be holistic. Flashing one point of data at a doctor does not get the job done; knowledge transmission needs to be accompanied by what this review called “reflective practice and a supportive environment.” Simply focusing on cost information may not be enough. The reasons that physicians order tests are more than financial, and efforts to influence their behavior most likely need to be more than informational.

Additionally, it may be that issues of price transparency need to involve more than one component of the health care system. While focusing solely on physicians, or on patients, might not work well, trying to work on both simultaneously might. It’s also possible that intervening solely on one procedure, test or drug at a time may not be as powerful as trying to influence spending on care over all.

Finally, trying to make physicians focus strictly on cost may be off base as well. Some care, even more expensive care, is worth it. What we really should attend to is value — the quality and impact relative to the cost. It is certainly harder to determine value than price, but that metric might make more of a difference to physicians, and to their patients.


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