Health care spending increases have slowed over the past couple years. Still, we are spending some $2.6 trillion—that’s trillion with a “T”—a year on health costs, which is a higher percentage of our GDP than any other developed country. And we don’t seem to be getting that much healthier. So economists and policy researchers are looking for ways to staunch the bleeding while ensuring that care remains good.
One group who can have a great influence on the overall cost of health care are the doctors—your primary care physician and your specialists. They are often the ones deciding how many tests and procedures to order and whether to follow evidence-based recommendations on the most effective options. Until now, little research had been done examining how much doctors differ in the costliness of their practice styles—just how much their work was costing insurers.
A recent report conducted by the RAND Corporation, a nonprofit, nonpartisan policy institution, shows that the biggest predictor of a doctor’s overall costs to the health care system is how long he or she has been practicing. “It is possible that one driver of health care costs is that newly trained physicians practice a more costly style of medicine,” Ateev Mehrotra, an associate professor at the University of Pittsburgh School of Medicine and a researcher at RAND, said in a prepared statement.
Doctors, including primary care physicians and specialists, who had less than a decade of experience had annual costs more than 13 percent above doctors who had more than four decades of experience, according to the new analysis. The findings were published online November 5 in Health Affairs. Other characteristics, among them physician gender, size of practice, credentials (such as being board-certified) and previous malpractice suits, did not seem to affect overall costs or mean cost per patient. Moreover, the higher-cost practicing styles of the less experienced physicians did not necessarily translate into better care.
The researchers analyzed insurance claims filed in Massachusetts between 2004 and 2005 (before Governor Mitt Romney instituted the state’s individual health care mandate), covering 1.13 million patients (ages 18 to 65) and 12,116 physicians. They were then able to generate more than 600 types of “episodes of care” (based on categories such as similar illness, severity and procedure and controlled by age, gender and comorbidities) to see how billed costs for similar “episodes” compared across doctors of the same specialty. Health plans often use this same type of reckoning to evaluate costs.
On a population scale, doctors with fewer than 10 years of experience had mean per-patient costs of about $14,906, whereas those with more than 40 years had mean per-patient costs of $10,104.
Both government-run and private health insurance plans are looking for smarter ways of reducing costs while providing for quality health care. Facing a budget shortfall in 2016, for instance, Medicare is looking to adjust how it pays for services based not just on what is proscribed (tests, treatments, and so on) but also on how well that service works—whether it is the most effective and affordable option available for the given situation.
Why is there such a large difference between these groups of doctors? It is possible, for example, that those fresh out of medical school are more familiar with—and more inclined to use—newer, more expensive treatments and tests (regardless of how effective they are). The authors also suggested that perhaps “lack of experience and uncertainty translates into more aggressive care,” they wrote. Additionally, this newer generation of doctors might simply continue to use higher-cost medicine even as they gain more experience. These data also suggest that unless they work to reduce costs, physicians with less experience might have a more difficult time being included to receive as much business from insurance companies and government programs that are looking for best-value providers.
The findings “underscore the need to better understand physician practice patterns and what influences that behavior,” Mehrotra said. He and his colleagues recommend considering additional training programs for new doctors “to educate physicians on their responsibility to be good stewards of health care resources.”