Do Patients and Families Care About Money?

In an earlier posting, I discussed evidence regarding how physicians respond to financial and other incentives such as pay for performance.  Many experts propose that increasing financial incentives for patients is an effective way to control health care costs.  The rationale is that spending is driven in large part by artificial demand from physicians who are paid based on volume of services, on the one hand, and from patients who, due to insurance, are insulated from the costs of the services they consume.  Can informed patients, armed with information about quality and cost, and having to pay those costs directly, drive the triple aim of higher quality care, lower cost, and better health outcomes?

It turns out there is some evidence on this topic.  In a classic study, and one of the few randomized trials of payment innovation, the RAND Health Insurance Experiment showed that when patients and families bear a larger share of the costs directly, via co-pays and other forms of cost sharing, they cut back on their utilization of medical services.  However, they reduce both necessary and unnecessary services similarly.  This suggests that having patients have more “skin in the game” can lower costs, but may actually lead to worse outcomes (although the study did not actually find worse health outcomes despite the decreased use of services).  Other studies, largely observational, have mixed but generally similar findings.  It’s not clear why this is.  It may be, as many health professionals argue, that medical care is too complex for even reasonably informed but untrained people to make judgments about quality.  Another possibility is that, given how expensive medical care has become, for most people with average means, there is no choice but to make decisions based almost exclusively on cost.  A co-pay of $175 for an emergency department visit may serve as an effective deterrent to seeking care even when needed if that represents a day’s pay (which it does if you make the median income for a family of four).

The challenge of looking to consumers to drive the push to lower health care spending is underscored by a recent study in Health Affairs.  Researchers at RAND conducted a set of focus groups among individuals with insurance to describe their willingness to discuss and consider costs when making health care decisions, and to identify barriers.  It may not come as a surprise to those of us who deal with patients and families, but there was in fact tremendous resistance to considering costs.  Participants expressed a preference for the “best care” regardless of cost, driven in part by equating “more expensive” with “higher quality.”  Moreover, there was a classic “tragedy of the commons” thinking, in that people felt that since they had paid into the common pool via insurance premiums, they were entitled to all they could get out of it, with no individual responsibility for stewardship of the shared resources.  As one participant said, “I probably should care, because we all pay in the end.  But in the heat of the moment, I’d be like ‘Fix my problem! I don’t care about anyone else.'”

As the saying goes “Everyone wants to go to heaven, but no one wants to die to get there.”

What do we as providers do?  I would argue that the evidence to date demonstrates that we will need to take a leading role.  To start with, we can eliminate waste in the form of unproven treatments, unnecessary testing, and duplication.  We can focus on the efficiency dimension of quality, along with the other dimensions such as effectiveness.  We can embrace rational, evidence-based guidelines to minimize unwarranted variation, such as the Choosing Wisely effort by numerous professional organizations.

I don’t want to minimize the challenges of doing so, highlighted by the recent findings from the Health Affairs study discussed above.  But anecdotally I have found that this approach can work.  One of the five interventions proposed by the American Academy of Pediatrics was to decrease the use of CT and increase the use of observation in children with minor head trauma, based on an evidence-based decision rule.  Since that rule was published, we have seen a decrease in CT scanning in our ED.  I find it far easier to talk with families with that rule in hand, explaining how the quantifiable risk of a bleed is outweighed not only by the economic cost but by the potential harms due to radiation exposure.  I’ve actually been surprised at how many people are receptive to discussing cost, as long as it’s framed in the context of their child’s health first.  If heath care spending is to come under control it will have to be led by us, health professionals who are able to balance our obligation to the individual patient in front of us with all the other potential patients out there.  Health care is a common good, and we need to be its stewards.

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