Shopping for Medical Testing

Research and comparison of suppliers and the prices of the goods they provide help us, as consumers, become smarter shoppers and ultimately save money.

Time magazine recently published a report documenting the many factors leading to the spiraling out-of-control health care costs in our nation. One of these factors that was profiled was that of physicians and their misinformation on the costs of medical tests, supplies and services.

As stated above, research and education on suppliers and costs can result in the reduction of costs and provide savings.  Alerting physicians to the costs of the test they are performing can lead to better-educated choices on quality yet cheaper tests and provide both the practice and patients with savings.

To test this “smart-shopping theory,” scientists at Johns Hopkins Hospital conducted a six-month experiment.  This experiment was to validate that showing doctors their respective test prices, and providing the doctors the opportunity to comparison shop for tests they frequently ordered, would then change decisions about services/tests ordered. The study identified 62 commonly ordered diagnostic blood tests and split the tests into two groups: Half of the tests came with their price, the other half did not.

The study then compared the purchasing behavior of the doctors and discovered that showing them pricing information resulted is a 9% reduction in the utilization of the tests overall and a respective savings of over $400,000 over the six months.   On the flip side, the study revealed there was a 6% increase in the utilization of the tests when pricing information was withheld from the doctors over the same period.

Johns Hopkins’ researchers say the savings can be largely credited to comparison shopping. Having the pricing information pushed doctors to re-evaluate what tests were actually medically necessary in order to provide the utmost care for their respective patients.  An example from the study relates to the ordering of routine blood tests:

 "A $15.44 blood test can check a patient’s electrolyte status, blood sugar levels, and kidney and liver function, a more basic metabolic blood test that’s $3.08 cheaper, evaluates all of the same things except liver function. Most patients without a history of liver disease or who aren’t on multiple medications may not need a regular check of their liver enzymes, and indeed, when information on the cost difference was available, doctors ordered 8,900 fewer of the comprehensive test and 8,900 more of the basic tests. This resulted in a savings of $27,000 over the six month study period.”

The study also revealed price comparison and transparency did not affect the ordering behavior for all medical tests.  Examples include MRI exams. These exams were ordered at the same frequency even when their cost was made available to the respective ordering physician. Some reasons for this behavior include the lack of different alternatives to these exams.

While physician “smart-shopping” will not be the final solution to solving the problem of out-of-control health care costs, there are plenty of opportunities where “smart-shopping” through price transparency could lead to more cost-effective health care.

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