When it comes to cutting care costs, doctors are caring but clueless

A doctor described this encounter in the ER.

"I rushed around the patient as he lay motionless with his eyes closed in the emergency room. He was pale and sweaty, his T-shirt stained with vomit. You didn’t have to be a health-care worker to know that he was in a dire state. The beeps on the monitor told me his heart rate was dangerously slow. I told the man that he was going to be admitted to the hospital overnight.

After a pause, he beckoned me closer. His forehead furrowed with concern. I thought he would ask if he was going to be OK or if he needed surgery — questions I’m comfortable fielding. But instead, he asked, “Will my insurance cover my stay?”

This is a question I can’t answer with certainty."

When it comes to the costs of what they order, doctors are caring but clueless.?That's a big problem given that about 3/4 of the cost of care comes from the doctor's pen, mouse or mobile device.

A?study?published in?JAMA Network Open?finds that very few physicians can accurately estimate patient out-of-pocket costs for medication filling.

The study surveyed 371 primary care physicians to determine if physicians can accurately estimate out-of-pocket expenses while providing the necessary expenses. Physicians were asked to estimate out-of-pocket drug cost at four points in time between January and December, using the plan’s four types of cost-sharing: deductibles, coinsurance, copays, and out-of-pocket maximums.

According to the study, only 21 percent of surveyed physicians accurately estimated out-of-pocket drug costs even when given access to necessary information such as a patient’s insurance plans and drug prices.

Contrary to the JAMA study’s results, most physicians participating in the research believe it is part of their obligation to have informative conservations regarding the cost of care with their patients. Physicians providing accurate prices can enable patients to make an informed decision about their health.

The chronic ambiguity surrounding how much health services will cost patients can undermine trust in physicians and health care organizations. But with the push for price transparency, it has become clear that answering the question, “How much will it cost?” is at times impossible.

But changing patient and doctor behavior is the holy grail and hard. When it comes to complying with federally mandated price transparency, hospitals are even worse.

This year, the federal government ordered hospitals to begin publishing a prized secret: a complete list of the prices they negotiate with private insurers.

The insurers’ trade association had called the rule unconstitutional and said it would “undermine competitive negotiations.” Four hospital associations jointly?sued?the government to block it, and appealed?when they lost.

They?lost?again, and seven months later, many hospitals are simply ignoring the requirement and posting nothing.

Here are 10 ways that might help doctors order less expensive tests and procedures:

1. Drive out unnecessary care. There are many reasons why there are unnecessary medical visits. Some have to do with the doctor, some have to do with the patient and many have to do with a system that rewards them.

2. Put a price tag on everything that they order and show them out of pocket costs. Why is this so hard? Because 1) medical cost accounting is archaic and most MBAs couldn't tell you what something costs to deliver, 2) they would have to use different business model that they would find to justify in the board room and 3) they don't want to kill the cash cow. Out of pocket costs are causing changes in prescribing patterns.

3. Create incentives to follow evidence-based care guidelines. Many doctors don't do what they are supposed to do and do what they are not supposed to do for many reasons.?

4. Tell patients no when they demand ineffective tests and treatments. I'm sorry, but the patient is not always right.?

5. Create rewards and principles of behavioral economics. We need to do a better job of how we respond to change.

6. Monitor and eliminate perverse triggers e.g. inappropriate use of prophylactic antibiotics in the perioperative period

7. Compare them to their peers

8. Address the underlying causes of Type 1 and Type 2 technology adoption errors

9. Make conflict of interests transparent??Physician entrepreneurs are viewed with suspicion because patients often think those doctors?have conflicts of interest (COI), i.e. they place something else, most often financial again, ahead of the patient's interest. There are many sources of conflicts of interest that are less apparent than doctors receiving money from digital pharma/medtech companies, such as cultural or religious beliefs, political affiliation, or even the teams they support on Sundays.?

10. Get a second opinion on second opinions?and tumor boards. In many instances, patients or payers don't want a second opinion, they want a second doctor.

11. Here is how to encourage surgeons to make cost effective decisions in the OR.

12. Leaders need to bridge this gap effectively; understanding the language of business and finance will mean successfully influencing those who manage the budget in an organization. Here are some ways to close the knowledge, skills, and attitudes gaps.

Health care organizations have long tried to enlist physicians in their effort to control or reduce costs. One effective means for doing so is to create an incentive system that rewards physicians for their contributions. To design such a system, organizations should take into account these considerations: whether the incentives should be broad or narrow; whether they should be individual- or team-based; for how long to compensate; how much to compensate; and what mix of financial and nonfinancial incentives to offer.

Patients are paying increasingly out of pocket and being charged with being better consumers of care and looking for sources of information about quality, price, and value. Unfortunately, their doctors won't be much help.?

Arlen Meyers, MD, MBA is the President and CEO of the Society of Physician Entrepreneurs on Substack