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Displaying the Cost of Lab Tests for Physicians in Their EHRs

Posted Jan 07 2014 12:00am

When looking for ways to provide incentives for clinicians to reduce costs through their ordering practice, it always seems that lab tests that come to mind. Here's a report about yet another published study that takes this approach (see: EHR cost data for docs? Big money saver ). Below is an excerpt from it:

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 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. [The 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 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, [another author of the study] said overall they observed a decrease in utilization rates for all 27 tests, but not all were statistically significant. ...."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. 

The authors of this study have discovered that showing the cost of lab tests to physicians in office practices at the time of test orders and via the EHR has saved "up to" the sum of $107 per 1,000 visits per month. This savings doesn't seem to me to be that remarkable. Alternatively, let's  consider other ways that displaying real-time information to physicians via EHRs might reduce costs. For example, how about displaying for physicians the savings of avoiding an MRI or CT scan for a patient or converting patient prescriptions from proprietary drugs to generics. My rough guess for the savings involved in these approaches could be $100 per patient visit rather than per 1,000 patient visits.

An interesting question that comes to mind is why studies like this one happen to focus exclusively on lab test ordering rather than other facets of physician ordering practices where much more significant savings could be realized. My guess is that studies such as this one are relatively easy to perform and then publish. Office physicians order a relatively small menu of lab tests for which the cost is easy to obtain. The authors of such a study then seek a reduction of test ordering in the intervention group after the physicians are shown the cost of such tests. It would also be interesting to determine whether such an experimental effect persists beyond the initial observation period to determine whether the effect is long-lasting. Any intervention usually causes changes in behavior simply on the basis of the intervention. If a longer observation period was introduced and the behavior change went away, there would be no paper to publish.

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