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Physician Culture, Beliefs Drive Variation in Healthcare Spending


 

The Dartmouth Institute for Health Policy and Clinical Practice and other institutions have long tried to quantify the prevalence and geographic variation of low-value care. Researchers have roughly defined low-value care as tests and procedures for which the potential benefit does not outweigh the potential harm, though the calculus can change significantly from patient to patient.

William Schpero, a former health policy fellow at the Dartmouth Institute and now a PhD student in health policy and management at Yale University, says he and colleagues initially identified three theoretical reasons for the geographical variation. An increase in the use of low-value care, they reasoned, might be driven by patients demanding more intensive treatments, by financial incentives to providers, or by providers supplying more services.

The paper identified “cowboys,” or physicians who used treatments that were more intensive than those recommended by guidelines, and “comforters,” or physicians who recommended more low-cost treatment protocols.

After adjusting for differences in the health status of patient populations, however, the Dartmouth Institute’s work consistently revealed large unexplained geographical variations, a finding that also held true for patients in the last six months of life. These variations, Schpero says, suggest that patient demand is not a major driver. A collaborative Dartmouth and Harvard study, released by the National Bureau of Economic Research in 2013, instead pointed to a more likely rationale, at least during the last two years of a patient’s life.

By linking patient and physician surveys to Medicare claims data, the report examined how physician and patient preferences affected overall healthcare spending in different geographic regions. The paper identified “cowboys,” or physicians who used treatments that were more intensive than those recommended by guidelines, and “comforters,” or physicians who recommended more low-cost treatment protocols.

Older physicians and smaller practices, the study suggested, were more likely to recommend higher levels of follow-up care and fall into the “cowboys” category.

It was this difference in physician culture and beliefs about effective treatment, not patient preferences, that drove most of the variation in healthcare spending. Monetary incentives, meanwhile, had only a marginal effect. If all physicians were to follow professional guidelines for effective care and not exceed recommended treatments, the report suggested, Medicare spending for end-of-life care could be reduced by 36 percent, “which is a huge, huge number,” Schpero says.

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