GME pilot opens "black box" of health care costs

July 10, 2014

The lack of cost transparency in the U.S. health care system is often talked about from the perspective of the patient/consumer, but what about its effect on providers? If a physician sees the dollar amount of a test before he/she submits the order, would their lab utilization become more informed? A recent pilot project in the OHSU internal medicine residency program attempted to address the “black box” of health care costs – with compelling results.

LarryHuan_AlanHunter_During a six-week period in 2013, OHSU internal medicine residents took part in a study designed around a “cost curriculum.” The educational materials included data on national health care expenditures, outcomes and publicly-available Medicare charges. These were coupled with discussions among residents about care interventions that would meet a patient’s needs while saving money.

Lawrence Huan, M.D., internal medicine resident (who graduated in June), and Sudhakar Karlapudi, MBBS, assistant professor of medicine, OHSU School of Medicine, led the effort. “Because of the financial impact to our patients and to the system as a whole, it’s essential we understand what services cost,” said Dr. Huan during a presentation about the study to the Graduate Medical Education Committee.

The results were noticeable: a 30 percent reduction in unnecessary interventions*, which was estimated to account for $108,000 in annual savings. See the utilization by lab test in this excerpt from Dr. Huan’s presentation. In addition, the ability of the residents to accurately estimate costs increased after the study, as measured by comparing pre- and post-intervention survey results.

“The internal medicine pilot is complementary to other respected national campaigns on responsible decision making, such as Choosing Wisely,” said Patrick Brunett, M.D., FACEP, associate dean for graduate medical education, OHSU School of Medicine. “I can see the potential benefit of implementing similar initiatives across all GME programs as an educational tool that could ultimately be transformative for the larger health care system.”

Dr. Huan talked about several strategies for prompting physicians to think about costs: a pocket card in the white coat, a dollar amount in the electronic health record or literature on the prevalence of medical bankruptcies.

*Criteria for unnecessary tests included:

  • Daily testing in stable patients (q 48h was accepted) 
  • Repeat labs in stable patients admitted for observation with unremarkable admission labs
  • Patients on stable doses of warfarin (q 48h was accepted)
  • Laboratory studies ordered on the day of planned discharge
Pictured: Dr. Huan (left) and Alan Hunter, M.D., associate professor of medicine