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June 14, 2017

One cost-cutting strategy that research says doesn't work? Telling docs about test prices

Daily Briefing

Research suggests that giving physicians information on the price of the health care services they prescribe does not affect their likelihood to prescribe those services, Aaron Carroll writes for the New York Times' "The Upshot."

How to thrive in a price-sensitive market

For instance, a study recently published in JAMA Internal Medicine found that physicians at three Philadelphia-based hospitals did not change their behavior when it came to ordering laboratory tests solely based on knowing how much the tests cost.

And another study, published earlier this year in Pediatrics, found no difference in the way physicians ordered lab tests for children when they were given the tests' costs. Moreover, the study found that physicians order more tests for adult patients when the doctors were aware of the tests' prices.

In addition, a study in the Journal of General Internal Medicine that focused on clinicians participating in an accountable care organization found no difference in the way physicians ordered certain tests when they knew the prices.


According to "The Upshot," there are various reasons why giving clinicians pricing information might not affect the way they approach care, particularly when it comes to lab tests. Providers typically order the tests based on reasons that are not financial, and more education is needed to influence those behaviors.

As such, education on pricing should be "holistic" and include both providers and patients, "The Upshot" reports. Price transparency efforts also could be more powerful if they focus on reducing health care spending overall instead of spending on just one service at a time. Further, the efforts should focus more on providing valuable care than providing low-cost care, "The Upshot" reports (Carroll, "The Upshot," New York Times, 6/12).

Four tools you need to fix your price sensitivity strategy

In today's market, medical group volumes and margins are threatened by the entrance of competitors, ranging from retail providers like Walmart to concierge options like MDVIP. At the same time, an increasing number of patients have more "skin in the game" when it comes to paying for their health care.

Check out our infographic to learn the four tools you need to fix your strategy—and examples of how your peers have fixed theirs.

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