What Doctors Don’t Know about Health Costs

April 14th, 2010 at 3:37 pm | 20 Comments |

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As a patient you may be overdue to have a conversation with your doctor about cost control. As a physician I know that doctors face many perverse incentives and pressures that contribute to our growing medical bills. Here are four ways we can promote cost control in medicine.


1. Teach it in Medical School. Medical students are bombarded with an onslaught of medical coursework to master in a short period of time. A good doctor must learn to be clinically competent, articulate, and compassionate; but are they ever taught to be cost effective?  This aspect of medical care is so low on the priority list of learning that it simply does not get taught in a meaningful way in medical education.

The solution is to integrate the importance of cost effectiveness from the first year of school.  Students should understand the reality of what tests and procedures cost.  Students should be tested on their knowledge of how to provide the most cost effective treatment without sacrificing quality.  You may be surprised that many doctors don’t know how much the medicines they prescribe cost their patients.  You can test this: ask your doctor if he/she has any idea how much the medicines you or your family take actually cost (not just the co-pay).  Doctors are often unaware that patients are spending hundreds of dollars each month on medicine.  If you are fortunate enough to have a low co-pay, then the insurance company is picking up the tab.


2. Patients should demand affordable treatment. Doctors may realize that the cost is relevant if patients ask if they are being prescribed the cheapest and most cost effective medicines.  For example, many blood pressure medicines cost pennies a month, but doctors prescribe more expensive medications out of habit, or because the drug rep dropped off a bunch of samples. Often if a patient simply asks if a cheaper medicine is available, the doctor can actually find it.

(As a side note – drug representatives love to give out free samples. Doctors distribute them, trying to be helpful at first. However, when the samples run out, the patients end up paying the high prices for these fancy new medications instead of using cheaper older medicines that are likely just as effective).


3.  Reduce the fear of lawsuits. When doctors practice under the fear of lawsuits, it leads to frivolous testing. This is not good medical practice, but it is the reality of dealing with the fear that they will be sued if the patient does have that disease which is only remotely likely.  This results in many expensive tests with very low yield.

Similarly, there is a large subset of patients who expect antibiotics for every cold, and an EKG once a year for “good measure”. I had a very educated acquaintance once tell me he “fired” his doctor because his doctor didn’t order enough tests.  He was much happier with his new doctor who ordered many more tests and never found anything wrong. His former doctor was probably practicing not only more cost effective medicine, but more sophisticated, reasoned medicine.  The doctor who uses his brain first, rather than simply shooting from the hip, will make better decisions with fewer tests.


4. Accept Reality. Healthcare is not free so we need to seriously consider how much money a life is worth.  Every life is “priceless” in its own way, but do you want to spend hundreds of thousands of dollars on the last days of each life in the intensive care unit, knowing the outcome will be death? This should be a very public discussion, but we can’t seem to do it without invoking “death panels” and “pulling the plug on granny”.

The same must be discussed in screening guidelines.  The recent USPTF recommendation to restrict mammogram screenings to women greater than 50 years old was met with a public uproar.  However, these guidelines are the same as those used in Canada, where women are not dying any sooner from breast cancer than Americans.

If you spend the money and screen many women in their forties, you will detect a few more breast cancers, and save a few more lives, but at a high cost. By that logic, we should start screening all women with mammograms in their thirties to save just a few more lives. How much are we as a society willing to pay for this additional screening? You can reduce this further to everyday testing.  Should we as a society insist on getting an MRI of the brain for every headache?  If we accept that most headaches are benign in nature, should we sue the doctor who doesn’t order the MRI when the headache turned out to be due to a brain tumor?

I am often struck by the statement that patients really believe that “their doctor knows best.” In the realm of cost control, I really think that is a big assumption on the part of the patient.

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20 Comments so far ↓

  • mlloyd

    When doctors practice under the fear of lawsuits, it leads to frivolous testing.

    There’s a certain internal logic to this statement, just as there is to the statement, “the workers will be oppressed until they own the means of production.” But in both cases, it doesn’t work like that in reality. See, e.g., this article on post-malpractice reform Texas: http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande

    Thanks for the thoughtful list of suggestions. There’s definitely a lot we can do.

  • thefamilymd

    I graduated medical school in 2000 and residency in 2003. However, most of my professors in medical school and in family medicine residency frequently discussed costs of tests, medications, hospitalizations, procedures, etc. I know the $4 drug list at Walmart better than I know the newest ARB. Almost every physician I know can also give patients an estimate of costs of medications, for example, using programs like epocrates. My clinic keeps up with costs of outside studies like x-rays for patients without insurance. Maybe you practice in an entirely different world than I do.

  • Dana King

    Well put. Good arguments in a critical discussion. Now if we can–as you note–get past the idea of “death panels” and get people to accept Number 4 isn’t rationing, we can get somewhere.

    The greatest offense perpetrated on the American during the health care debate was how badly reasoned discourse was hampered by what can only be described as lies. “Differences of opinion or interpretation” doesn;t begin to describe it.

  • balconesfault

    Dana – but I think that #4 is rationing.

    It’s just that some measure of rationing is essential for efficiency.

    We all ration. We ration our time. We ration our money. We ration what we pay attention to.

    It’s just right now Republican dogma is that healthcare should be rationed purely based on ability to pay. Healthcare reform was based on the premise that some level of healthcare should not be based on economic circumstances. Taken to extreme, this premise does pose the possibility of no ability to control system costs.

    Clearly, for cost efficiency the system does need to ration to some extent. And those who are unhappy with a system that rations should be able to purchase coverage outside or above the coverage provided by the government.

    We have to get away from the attitude that rationing is some kind of evil. It’s a necessity. We just have to figure out how little rationing we can afford as a society.

  • sinz54

    balconesfault: Dana – but I think that #4 is rationing.
    You’ll never justify it on that basis to individualistic Americans.

    But you can justify it on the basis of trade-offs against side effects.

    It’s not just that CT scans cost more money than X-rays. It’s also that the radiation from CT scans is far stronger than the radiation from an equivalent X-ray, and hence much more dangerous. I’ve taken so many CT scans by now that I’m close to the safe limit of radiation my body can take before I have to start worrying about malignant glioma and leukemia and stuff like that. But physicians didn’t tell me about those problems when they authorized CT scans for me.

    And so, I would add #5 to the list:

    5. Discuss potential side-effects (both physical and psychological) with every patient before he authorizes the treatment.

    Currently, doctors are VERY reluctant to discuss potential side-effects–until they actually happen. Obviously they’re worried that if they tell the patient about all potential side effects of a drug or treatment, it may scare off the patient from the treatment. But coping with side effects has major economic implications. Treating a severe allergic reaction to a drug can be much more expensive than the drug itself. (The most egregious example from recent years: Ketek, an antibiotic which caused irreversible liver failure. It’s still on the market–but with a strong warning about this potential side effect.) By patients choosing a course of treatment that properly balances hoped-for effects against potential side effects, they will be making an economic choice too.

  • sinz54

    balconesfault: Dana – but I think that #4 is rationing.
    You’ll never justify it on that basis to individualistic Americans.

    But you can justify it on the basis of trade-offs against side effects.

    It’s not just that CT scans cost more money than X-rays. It’s also that the dose of radiation from CT scans is higher than the dose from an equivalent X-ray, and hence more dangerous. A patient should not have unnecessary CT scans. But doctors rarely discuss that problem with a patient when the doctor calls for a CT scan for the patient. I’ve had CT scans and the doctors never asked me how many CT scans I’ve already had–even though there is a lifetime safe limit on how much radiation you can absorb.

    And so, I would add #5 to the list:

    5. Discuss potential side-effects (both physical and psychological) with every patient before he authorizes the treatment. This should be done with reference to the patient’s prior medical history.

    Currently, doctors are VERY reluctant to discuss potential side-effects–until they actually happen. Obviously they’re worried that if they tell the patient about all potential side effects of a drug or treatment, it may scare off the patient from the treatment. But coping with side effects has major economic implications. Treating a severe allergic reaction to a drug can be much more expensive than the drug itself. For breast cancer, women will choose a minimalistic surgical procedure (lumpectomy) if it will work rather than radical mastectomy, because the psychological effects are easier to deal with. Maybe they’ll be able to skip psychotherapy, marriage counseling, etc.

    By patients choosing a course of treatment that properly balances hoped-for effects against potential side effects, they will be making an economic choice too. If they are well informed about those issues before choosing a treatment.

  • thefamilymd

    “Currently, doctors are VERY reluctant to discuss potential side-effects–until they actually happen.” Huh? Do you practice medicine? Even for antibiotics or hypertension medications or ANY procedure, I must always discuss the pros and cons and detail the most likely side effects. Every doctor I’ve seen and heard also discusses medication side effects versus the effects/risks of not taking a medication. For procedures, the side effects and risks–in exquisite detail–must be written, discussed and the patient signs and receives a copy sometimes days or more before a procedure. In many places, it is the law.

  • Sunny

    The conversations in this thread are interesting in that they sort of provide a snapshot of the nation.

    Some places do managed care excellently. Some places spend a lot of money on tests without measurably better results. Some places have doctors who know to the penny what a procedure will cost, and how to help a patient get there if they can’t afford it. Some doctors don’t even know what their own office visit costs (that would be my otherwise stellar GP — and his ignorance of his own fees is pretty much mirrored by nearly all the doctors in this area, who in testimony, when asked what their bill for a patient is, simply state that they have no idea and someone else handles it)

  • Fredgei

    thefamilymd:

    “Even for antibiotics or hypertension medications or ANY procedure, I must always discuss the pros and cons and detail the most likely side effects.”

    When I had my most recent serious medical issue, my doctor failed to do that. I learned the consequences of accidentally having too much warfarin in the system from a co-worker, who told me about his father bleeding to death because the nursing home couldn’t be bothered to do regular blood tests. I suspect you’re practicing the *right* way, and Dr. Green is discussing the way those who have been physicians more than a decade or so actually do things.

  • budgiegirl

    I think if the world operated as FamilyMD describes – then the costs of medical care would be much lower. And I applaud FamilyMD for being so cost conscious. But I have to agree with Sunny that there is huge regional variability, as well as variability in quality of trianing. And I agree with Fredgei that time out from training matters. I work at a VA hospital and for every new patient into “the system”, I generally have eto go through the private medications they have been prescribed, and invariably I can find cheaper medications that work just as well. And many of the medications I end up prescribing could just have easily been prescribed by their private provider using generics and $4 copays on “the walmart list”. Although I have been in practice about 15 years, I recently went through my board recertification just a few years ago, and I am sure there was not one question about cost. It’s been a major victory just to have doctors practice evidence based medicine (where there is scientific data to support what we do). But I don’t think we have systematically tackled the problem of doctors over-spending by way of excessive testing, unproven interventions, and expensive prescribing habits.

  • thefamilymd

    Good points from everyone. I do have some patients who are new to me and are already taking very expensive medications when there isn’t any evidence that a $10 or less med from the same class of meds would be just as effective.

    I also think it is unethical for physicians to own stocks in pharmaceutical companies. Just throwing that out there. :)

  • balconesfault

    I also think it is unethical for physicians to own stocks in pharmaceutical companies. Just throwing that out there.

    That, plus getting paid expenses from pharma firms to annual “training” seminars in resort locations (with returns invitations the following year usually extended to those physicians who seem to prescribe more of the med). I wonder if the British Health Service sees these kinds of conflicts of interest?

  • budgiegirl

    There’s also doctors with financial interests in imaging centers (MRI, Ct, etc) and can bill just for getting an MRI done. Total conflict of interest.

  • thefamilymd

    I agree with both balconesfault and budgiegirl on these last two points as well. I have a radiology center I prefer because they are fast, efficient, AND cheaper. I always point out, though, that the pt can go where she wants to go and that I have no $ interest in the place I prefer. (I don’t know the owners, either.)

  • Rabiner

    As mentioned in this thread many Doctors receive financial incentives to prescribe specific medications, perform specific tests or refer patients to other locations for procedures is unethical and very common. In addition it is common that patients are equally to blame on many of these issues due to their willingness to believe drug advertising. “Speak with your doctor about drug X if you have these amazingly vague and common symptoms” leads to people demanding a specific medication or them leaving the doctor’s practice. All of these things increase the costs of health care in this country without adding any real value in outcomes.

  • sinz54

    thefamilymd: I have a radiology center I prefer because they are fast, efficient, AND cheaper.
    Where I live, price information is usually just not available, until after you get the bill.

    No other service works that way.

    You don’t agree to major auto repairs until you get an estimate first.

    You don’t agree to major home remodeling until you get an estimate first.

    But most folks just have surgeries or other major medical care, without even asking how much it will cost.

    The third-party health care system we have, where employers provide “free” (tax-exempt) group health insurance to their employees, is responsible for this. It means that employers have no skin in the game, and employees have very little (often just a modest co-payment).

    I once had received medical care from a physician that was so poor that I decided he didn’t deserve to be paid for it. Essentially, I wanted my money back, just like you do with any other service. I telephoned my insurer and suggested that they withhold payment for the doctor’s failing to treat me properly. The insurer’s representative said that they are not responsible for the doctor’s treatment and hence they cannot withhold payment. They said that any complaints are between me and the doctor.

    And there you have it!
    The insurer isn’t responsible for the doctor’s care and will continue to pay for it, no matter how poor it is.
    Your employer isn’t responsible and will continue to provide “free” group health insurance.
    You’re not responsible because other than the co-payment, it’s no skin off your nose.

    The entire system is designed to remove any accountability. The doctor gets paid no matter what. The only alternative is a malpractice suit. But a malpractice suit involves a doctor who failed to follow proper procedure. You can’t sue a doctor for just being a lousy doctor. For that, there is no recourse today, none at all.

  • Rabiner

    sinz54:

    for major health issues do you think knowing the price upfront will really change consumer behavior? It its between bankruptcy and death I think i’ll choose bankruptcy. Sure there can be shifts in consumer behavior on minor issues or on people who think they can skirt the risks of not taking a particular medication but I just don’t see it being very significant a change in consumer behavior.

  • mckathy

    Precisely why healthcare decisions should not be made with ability to pay as a consideration.

    Precisely why we should have a single payor system.

  • Rabiner

    McKathy:

    Yea I’m a proponent of single-payer in some form due to how the market being incapable to work correctly with regards to health care but that isn’t going to happen.

  • budgiegirl

    I love being a salaried physician (I don’t get paid per service). I have no financial interest whatsoever. Heck I can’t even get a drug rep pen when I need one. I can’t tell you how many times I have told patients who are reluctant to try a new medicine, Look – it is totally up to you what you do. I’m just here to give you my best medical advice. I won’t make a dime one way or the other. It makes me feel free and I think patients respect that.