‘Physicians don’t really have a sense of how much stuff costs.’

November 22, 2013

Out of control healthcare spending in the U.S. is no secret. Annually, healthcare expenditures currently stand at a whopping $2.7 trillion, a number that has industry leaders rushing to take new cost-cutting measures.

One of those measures involves displaying the costs of laboratory tests in an electronic health record so docs can see a real-time price comparison of what they’re ordering. And, from a financial savings perspective, it’s working.

According to a new Atrius Health study published in the Journal of General Internal Medicine, docs who regularly viewed lab test cost data in the EHR both decreased their ordering rates for certain tests and saved up to $107 per 1,000 visits per month. Lab test utilization also decreased by up to 5.6 lab orders per 1,000 visits per month.

Thomas Sequist, MD, Atrius Health director of research, Harvard Vanguard primary care physician and co-author of the study, said these findings have big implications.

For a smaller physician practice that typically sees 1,000 patients per month, perhaps not as much, but if you’re talking a large physician practice bringing in 20,000 visits per month, that’s $2,140 per month and more than $25,000 each year.

“Physicians don’t really have a sense of how much stuff costs,” said Sequist in an interview with Healthcare IT News. “The primary goal of our project was to try to give doctors that background information so that they could be more educated.”

The study, led by Daniel Horn of the Massachusetts General Hospital’s Division of General Medicine, surveyed 215 primary care docs at Atrius Health.

Physicians in the intervention group received real-time information on laboratory costs for 27 individual tests when they placed their electronic orders, while the control group did not.

Significant decreases in ordering rates were observed in five out of 27 of the high and low cost lab tests. When asked why this proportion wasn’t higher, Sequist said overall they observed a decrease in utilization rates for all 27 tests, but not all were statistically significant.

“Even though it didn’t hit the statistical significance for that individual test, the fact that all of them are going in the right direction is probably real,” he said.

Also important, however, as Sequist pointed out, was that 49 percent of their doctors actually felt like they had enough information to make that ordering decision.

“This project is really an attempt at trying to help those 51 percent of doctors who don’t think they have enough information, to try to get them more of that information,” he said.

What’s more, he added, there seems to the general feeling that physicians don’t think it’s appropriate to consider costs in the workplace, that it’s not the role of the physician. “Our survey data actually indicate that many of our physicians are perfectly willing to think about that in context of value,” Sequist said.

Overall, “Our study demonstrates that electronic health records can serve as a tool to promote cost transparency, educate physicians and reduce the use of potentially unnecessary laboratory tests by integrating the relative cost of care into providers’ decision-making processes,” said Sequist in an Atrius news release. “It’s like putting price labels on goods you buy in the supermarket. When you know the prices, you tend to buy more strategically.”