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The New Cost-Conscious Doctor

Doctors practicing in the U.S. are becoming increasingly conscious of the increasing costs of health care. Most consider themselves cost-conscious, and are considering the impact of their practice patterns — in terms of prescribing medicines, tests, and procedures — on the nation’s health bill. In fact, most physicians feel they have a responsibility to bring down health costs.

This perspective on physicians comes from the survey report, The new cost-conscious doctor: Changing America’s healthcare landscape, from Bain & Company, published in March 2011. Bain spoke with over 300 U.S. physicians to assess their perspectives on managing costs, drug and device usage, and standardized care protocols.

The top-line finding is that, regardless of physician demographic — whether male or female, salaried or productivity-based, specialist or generalized, urban or rural, young or mature, doctors uniformly see that they must change clinical practice patterns to accommodate the realities of health economics.

The impacts of this on the practice will be many, including:

  • Consolidating practices, increasingly being absorbed into hospital systems
  • Decreasing utilization as a direct response to incentives
  • Promoting preventive care
  • Adapting to standardized treatment protocols.

Jane’s Hot Points: Bain rightly points out that these changed physician attitudes and behaviors will ripple through the health supply chain on to life science, medical device, pharmaceutical and technology companies. Organizations in these health supply segments must demonstrate value to physicians and patients in the larger health ecosystem in order to be adopted into clinical practice.

That physicians see cost management as part of their jobs now means that their decisions will be increasingly impacted by their collective cost consciousness lens. Accountable care models, medical homes and more tightly integrated delivery networks will bolster this approach and tightly focus that cost conscious lens. Physicians will be less inclined to try out new-new products without firm proof-of-concept and references from peer physicians who are influencers in their field. Over one-half of physicians told Bain that they’d be using comparative effectiveness analyses within 2 years.

Furthermore, physicians are growing more comfortable with practice protocols and standardized care, Bain found. They’re using clinical guidelines more often in 2011 than 5 years ago; this is especially true of younger physicians, who more often refer to practice guidelines for patients. The mass adoption and full implementation of electronic health records will enable such protocols to be pushed to clinicians at the point-of-care. In fact, physicians expect a five-fold increase in the prevalence of electronic access to clinical treatment guidelines, and an 8-fold increase in pay-for-performance programs.

For manufacturers in the health supply chain, the major challenge is to develop and market products that help lower the costs of health care. That’s the new definition of “innovation” in health care.

Jane Sarasohn-Kahn is a health economist and management consultant who serves clients at the intersection of health and technology. Jane’s lens on health is best-defined by the World Health Organization: health is a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity. She blogs at HEALTHPopuli.

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Michael MenckesusanBill GustafsonDave JonesAnother blogging nurse Recent comment authors
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Michael Mencke
Guest

Hiya, I am really glad I have found this information. Today bloggers publish just about gossips and net and this is actually annoying. A good site with interesting content, that is what I need. Thank you for keeping this website, I’ll be visiting it. Do you do newsletters? Can not find it.

susan
Guest
susan

Good to know providers are very concerned. Welcoming patients to ask questions and be a partner in the care of their health may help to reduce costs. People may find this video helpful when forming Qs: http://tinyurl.com/4odprtz

Bill Gustafson
Guest

Many years ago I was an administrator and now I sell medical equipment and supplies. I started my company to be a low margin supplier and that was doing my part to reduce costs, other members of this community must find their way in this matter. I feel for the doctor who entered the field 30 years ago who now doesn’t recognize his field because of all the changes. 30 Years ago he was his own master but today through regulation and fear of economic loss he has little choice in what he does. He was right back then and… Read more »

Dave Jones
Guest

My 20 company seeks to do its small, tiny part in keeping costs down for ultrasound equipment as best as we are able…click on my name to learn more.

Hu Williston
Guest

The system needs all the primary care providers it can provide and we do not need to argue about extent of privileges but only supply the data. How mluch per encounter per patient does each one cost including down stream costs such as ordered tests or therapy. What are they ordering such as how many MRIs, x-rays, antibiotics, referrals, pain medications. Certainly for all public money ie our taxes being spent, these figures should be available on line by provider number and zip code to make the vast data digestible. I for one as a primary care provider would dearly… Read more »

Tim Richardson, PT
Guest

Actually, no. We don’t have good access to downstream costs. Private sources, such as commercial insurers, are proprietary and public sources, such as Medicare, are protected by law. To improve transparency, the Wall Street Journal took the lead Jan. 25th, 2011 to sue Medicare to release doctor referring and billing information, which has been locked up tight since 1979. http://www.krogerlaw.com/blog/2011/02/suit-filed-to-open-medicare-physician-payment-database-to-public/ Please note that, as a private practice physical therapist, I bill Medicare Part B under the physicians’ fee schedule and my claims data would also be made public if the WSJ lawsuit is successful. I fully support the efforts of… Read more »

Miranda
Guest

I hope hecan account on real positive changes.
“For manufacturers in the health supply chain, the major challenge is to develop and market products that help lower the costs of health care” – lower the costs for WHOM? The memories of my doctor strongly advising costly meds while cheaper (and no less effective) alternavies were available are still fresh in my mind so it’s really hard for me to believe in cost-conscious doctors. Once you get burned you become really careful.

The blogging nurse
Guest
The blogging nurse

Ms. Saunders, You are highly uninformed regarding the NP education. The education is not solely online AND we do manage patients on our own depending on where we are in our training. Do we have 20,000 hours of clinical time? No… then we would be Doctors. I find it funny that you and Mr. Smith seem to be so angry about the NP profession. Again, we are not trying to be doctors. If we were, we would go to medical school …. (I dare you both to avoid below the belt comments here). I would also like to remind you… Read more »

Another blogging nurse
Guest

I agree that I see more and more physicians using evidence based clinical guidelines and I see nothing wrong with that. These guidelines were created for a reason and a lot of time and effort were put forth by researchers to create them. I also think they are cost effective as well. I am a new family nurse practitioner and we were always taught in school to check the evidence based research and the guidelines when we are unsure of ourselves. I think a problem with rising healthcare costs occurs in the hospital setting not primary care. I don’t know… Read more »

The blogging nurse
Guest
The blogging nurse

Mr. Smith,

Thank you for expressing your OPINIONS so eloquently…. your level of sophistication and modesty are inspiring.

Sincerely,

The blogging nurse

P.S. There IS evidence that Advanced Practices Nurses have outcomes similar to those of MDs despite the difference in education. Perhaps this is due to the vast amount of RN experience that most APRNs have prior to obtaining their Master’s degree. APRNs are not trying to replace MDs and are aware of their scope of practice.

MD as HELL
Guest
MD as HELL

Or this illustrates how unnecessary a lot of healthcare consumption is: None of it affecting the outcome, and none of it paid for out of pocket by the patient.

Susan Sanders
Guest
Susan Sanders

Oh come on, thats a joke. NP programs are 100% online and their clinical “trianing” consists of nothing more than shadowing.

MDs get over 20,000 hours of clinical training during med school and residency. During residency they actually have to take care of patients without any attendings in house. NP students NEVER come even close to that level of responsibility during their so-called “training”

Tim Richardson, PT
Guest

Implicit in both Sanders and Smiths’ arguments is the association between credentials and quality. That relationship does exist but it is not as large as many, including the lay public, believe it to be. One of the biggest investments in healthcare is the desire to manage complexity through specialization. That is why doctors spend so much time in school. Physical therapy and nursing education is organized the same way except that these programs do not graduate professionals with the only unlimited license in healthcare – licensed to provide care but perhaps unqualified to do so. Our belief that the mind… Read more »

Jason Smith
Guest
Jason Smith

Well Tim Richardson PT certainly isnt biased. It just so happens that the physical therapists he represents want the SAME AUTHORITY TO ORDER EXPENSIVE IMAGING TESTS AND PRESCRIBE EXPENSIVE MEDICATIONS THAT THE DOCTORS DO. Imagine that. What a joke. We have a physical therapist on here telling us that doctors order too many tests. IN the same breath, his lobbying organizations are trying RIGHT NOW to get state legislatures to certify physical therapists as “primary care providers” SOLELY because that means they can order the same imaging tests that doctors do. Dont piss on my back and tell me its… Read more »

Tim Richardson, PT
Guest

You’re right – nurses here in Florida have had legislation in Tallahassee for 16 years that would lower costs by giving them additional prescriptive authority and allow them to work unsupervised in retail clinics treating sore throats, bad backs and ankle sprains. The legislation never even makes it to committee because of powerful lobbying and entrenched self-interests (one legislator is an orthopedic surgeon). The FMA and various specialty groups are trying to protect their volume rather than find better ways to deliver care. As for imaging and drugs – no thanks. Physical therapy, exercise and behavior modification is the first,… Read more »

Jason Smith
Guest
Jason Smith

NPs already have authority in Florida to script meds, yet costs keep going up.

There goes your myth that nurses will save money on healthcare. In fact they usually raise costs becasue they refer anything thats more complicated than strep throat to a specialist like an ENT surgeon which greatly increases costs.

Tim Richardson, PT
Guest

I’m the blogging physical therapist and, like the blogging nurse, I don’t see cost-consciousness in my cold, dark corner of healthcare. I see physicians practicing according to predictable patterns like routine lumbar x-rays for non-radiating lumbar pain. I see routine MRI and neurosurgical referrals prior to physical therapy for uncomplicated spinal pain. I especially see these patterns when the physician owns the x-rays and the MRI to which she refers the patient. Yes, I understand I’m biased. I also understand what the evidence says about my small niche of healthcare. Expensive imaging and complex specialty services are vastly overutilized for… Read more »

MD as HELL
Guest
MD as HELL

Chiropractor or Physical Therapist: Either way an expensive way to wait it out.

Gary O.
Guest
Gary O.

Sorry, my remarks were addressed to Killroy71’s post.

Gary O.
Guest
Gary O.

Your argument is twisted, illogical and mischaracterizes Krugman’s remarks. First, you state that “MDs are our personal shoppers in the world of health care goods and services.” You go on to acknowledge that your MD may not be cost-conscious because, after all, “she’s in business with overhead and student loans to pay (so I read),” implying that your personal shopper would have you over-utilize medical services for her financial gain; but never mind, you can put your “foot down” and control costs by figuring out which prescribed tests and screenings are superfluous. Give me a break. Contrary to your implication… Read more »

The blogging nurse
Guest
The blogging nurse

As a practicing RN in the acute care setting, I do not witness these cost-conscious doctors you speak of. I find this article refreshing to read and I hope you are right. Just last week, I had a conversation with a colleague discussing the fact that it doesn’t seem as though Medical students are taught to consider the financial reprocussions of ordering a “just in case” test. I work in a teaching hospital and Interns, Residents and doctors all the way up the chain of command order test after test. Some necessary, some not. As a future Primary care provider… Read more »

Jason Smith
Guest
Jason Smith

This is garbage; NPs have literally 1/4th the training that real doctors get, and there’s absolutely ZERO evidence that they are more “cost conscious” than doctors.

In fact, NPs are more likely to refer patients to expensive specialists than doctors are, thus driving up costs considerably.

Barry Carol
Guest
Barry Carol

Tim —

What’s your guess for how long it will take until the surgeons in the not hostile to clinical guidelines group reaches sufficent critical mass to drive the healthcare system generally toward more cost-effective practice patterns and more convergence around clinical outcomes and choosing patients who are appropriate candidates for surgery in the first place?

Tim
Guest
Tim

I recruit and hire surgeons, and I can tell you the younger ones are not hostile to clinical guidelines like the older generation was.

MD as HELL
Guest
MD as HELL

Wait until they get burned by the white envelope with the green border. Guidelines are mistaken for standards of care. They are not. Therer will be plenty of hostility.