How to Evaluate Cost to Improve Care, Retain Patients

Did you know that a hemodialysis session costs about $130, the average surgeon's fee for a radical prostatectomy is about $1,500, or that it costs nearly $2.500 less for a patient to have a bladder repair operation at an ambulatory surgery center than in a hospital?

You may not know these numbers, but you should be aware that your patients might. With a few minutes of research, patients are now able to find out the relative cost of care on sites like Health Care Bluebook, Fair Health Consumer or Healthcare Atlas.

But keeping up with your patients shouldn't be the only reason you know how much services cost. Understanding prices can help you contain costs, improve care, and retain patients.

Peter Ubel, MD, Professor of Public Policy at Duke University in Durham, N.C., related that he was at a conference session in which a physician in the audience told a story about his experience with patients and cost. The physician was recommending some imaging tests for a young college student. She pulled out her cell phone in the office, accessed her insurance company's website and looked up how much the tests would cost. They were going to be expensive and she was living on a student's budget so she wanted to discuss his recommendations.

“He was taken aback and kind of upset about talking with her about these things,” Dr. Ubel said. “No one entered the medical field to be in a stagnant, static occupation. We like it because it is always changing, so congrats, you get to change.”

Cost is on patients' minds more than ever in part because of ever-increasing out-of-pocket expenses. Most physicians have had conversations of this kind with patients, even if it was just someone complaining about the cost of medication, Dr. Ubel said.

Cost reduction

In a study published in JAMA Internal Medicine (2013;173:903-908), Leonard S. Feldman, MD, and colleagues at Johns Hopkins Health System in Baltimore examined whether knowledge of costs affects physicians' treatment decisions. They randomly assigned 61 diagnostic laboratory tests to an “active” arm (with fees displayed) or a control arm (with fees not displayed). During a six-month baseline period, no fee data were displayed. During a six-month intervention period one year later, the researchers displayed fees based on the Medicare allowable fee for active tests only. For the active arm tests, rates of test ordering declined by 8.6%. For control arm tests, ordering increased by 5.6%. Dr. Feldman said he and co-investigators observed the most change in the inexpensive but frequently ordered tests.

“It was the CBC and basic panels ordered several times a day that patients don't really need to get the best care possible,” Dr. Feldman said. “One of the ways we are going to help create a system that is more value driven is if physicians are able to keep in mind that things they do have a cost.”

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