77
Commentary Playing the Cost-Containment Game WILLIAM 0. ROBERTSON, MD, Seattle, Washington
the midst of today's era of "cost containment," physicians are expected to play a major role. Many of us insist we do. After all, our actions and orders initiate the spending of some 80% of our nation's health care expenditures. But, to be successful, ought we not be familiar with the "costs" involved so that we, like consumers in the supermarket, can be "price conscious" as we go about our daily business? Just what evidence is there that we are adequately informed about costs to be sure we get heard? In 1975 Skipper and colleagues reported that as medical students evolve into physicians and as physicians gain experience, they become ever more accurate in their estimates of medical costs-diagnostic tests, drugs, procedures, and so forth. 1.2 Being a professional skeptic, I replicated their study in December 1976 and did so annually through 1987, for a total of 11 years. The process was simple: A survey form was distributed to all attendees at the Children's Hospital and Medical Center (Seattle, Washington) Grand Rounds, and all were implored to fill in the blanks with their best "guesstimates" of the costs of ten common hospital services. These included chest x-ray, neonatal intensive care daily charges, and throat culture; the specific items remained constant over the decade. Respondents also indicated their medical staff status-attending, resident, intern, fellow, or medical student. I then tallied the data, computing separate means for each of the ten items for each of the groups and the percentage of the responses that fell within +25% of the actual costs at the time of the actual study-again, by item and by respondent group. Each January, I reported back to the attendees the results-along with the actual costs involved-and drew considerable interest in the process. Moreover, I was fortunate in conducting this study as three "interventions" were introduced into our hospital operation: distributing copies of patients' bills to all members of the medical team involved in the care; posting an itemized price list on each of the clinical units; and adapting that price list to a user-friendly computer made available on each unit as the avenue of communication with the laboratory, radiology, medical records, and others. Naturally my null hypothesis was that none of these innovations would affect accuracy rates each subsequent December and that experience per se would also be of no consequence in enhancing the accuracy of cost estimates. Imagine my distress as the data that came in bore out those null hypotheses! Let me explain. Each year some 90 attendees completed each exercise, with at least 20 in each of the separate groups. Simply put, the mean guesstimates were not that far off targets, being within 10% of actual costs, but, consistently, less than a third of the respondents' guesses fell within Skipper and associIn
ates' gold standard of +25% of the actual cost. At no time during the ten years of the detailed study were the medical students' mean estimates significantly different from those of the other respondent groups, nor did their "spreads" (variance) differ from those of other groups. Moreover, as far as I could tell, each of the innovations was without notable effect-the means and spreads showed no significant changes during the years after they were introduced. So much for the bad news. There may also be good news.
When the means of all the respondents in any given year were totaled and compared with the totals of the actual costs involved, the differences averaged less than 5% for each of the ten years. Even more notable was the observation that over the decade, while the annual percentage increment of the "medical care component" of the federal consumer price index was 9.0% per year, that of the respondents' guesstimates was also 9.0%- 81.4% total for the former and 81.0% total for the latter!-suggesting that though the respondents were ignorant of the cost of specific items, they were surprisingly conscious of both global costs and inflation.`31'1 "So what? Is there any take-home message applicable to today's cost-containment game?" you might ask. I think so. Admittedly our samples were small and subject to bias; surely it would have been preferable had all the specialties been represented. But our data were remarkably consistent, with no internal conflicts over the span ofthe study. Nonetheless, replication would be highly desirable. In the meantime, let's all agree that we are, in fact, surprisingly ignorant of individual cost items and that we should be wary about sharing that ignorance with patients if we do not look up actual costs before reassuring them. "Don't shoot from the mouth when it comes to costs"-or should it be "charges"?especially as Representative John Dingell's investigations subcommittee of the House Energy and Commerce Committee has "exposed" the enormous but widely divergent markups prevalent throughout the medical care industry (M. C. Kimball and C. Havighurst, "House Panel Grills Humana," Health Week, October 21, 1991, vol 5, pp 1, 32). So, too, we need more precise information when we participate in negotiations or press conferences where we are presumed to be informed. Tierney, Ball, and others have argued that rather than push familiarity with costs per se, we would all do better to focus on "value."45 In truth, because value is a function of costs and benefits, access to cost data would still be essential to establish value. As Samuel Johnson said centuries ago,
"Men more frequently need be reminded rather than informed," which is surely the case with cost data. Today, with cost schedules changing almost daily, keeping up with such changes would seem mandatory if we as physicians are really
(Robertson WO: Playing the cost-containment game. West J Med 1992 Jul; 157:77-78) From the Department of Pediatrics, Children's Hospital and Medical Center and the University of Washington School of Medicine, and the Seattle Poison Center and Washington Poison Network, Seattle. Reprint requests to William 0. Robertson, MD, Children's Hospital and Medical Center, 4800 Sand Point Way NE, Seattle, WA 98105.
COMMENTARY
78
should, we as individuals or as members of the profession do anything to rectify the situation? Or is it too late to do other than give the appearance of doing something? Our data verified that physicians as a group have a surprising global knowledge of costs and a feel for changes going on around them. Now all we need is quick and ready access to specific bits of data to flesh out our capacity to help our patients and ourselves actually win the cost-containment game. Who will take the first step to get the job done?
serious when we proudly proclaim our efforts at cost containment. Without an awareness of these cost changes locally, how can individual physicians conceivably discharge any obligation to try to constrain medical cost escalation? So, too, on both the state and national levels, how can the profession profess to be making such an effort when its component organizations must be assumed to be comparably ignorant? At this point I admit to a bit ofbias and a tad of paranoia. I worry that our medical profession, individually and as a group, repeatedly finds itself in a defensive mode of trying to play catch-up on financial matters. Invariably we are forced to rely on data gathered and massaged by others. Frequently the whole process takes place well in advance of our opportunity to participate in any critical way or even to become familiar with the real meanings of the terms being used. This is hardly an ideal spot to be in, especially as the nation seems to be approaching some type of a "nationalized" health care program. Will a word to the wise be sufficient? Can, and
*
REFERENCES 1. Skipper JK, Smith G, Mulligan JL, et al: Medical students' unfamiliarity with the cost of diagnostic tests. J Med Educ 1975; 50:683-690 2. Skipper JK, Smith G, Mulligan JL, et al: Physicians' knowledge of cost: The case of diagnostic tests. Inquiry 1976; 13:194-199 3. Consumer Price Indexes. Washington, DC, Govemment Printing Office, 1988 4. Tierney WM, Miller ME, McDonald CJ: The effect on test ordering of informing physicians of the charges of outpatient diagnostic tests. N Engl J Med 1990;
322:1524-1525 5. Ball J [interview]: Better cookbooks needed to guide physicians. Hospitals 1988; 62:96-98
*
*
ALPHABET for Alicia Last night I bound you to the letter A. Your spine curving in the X-rays became the stack of blocks I built spelling your name, a father's wobbly trick and hope to hold you, laughing, to harness and frame-your first friend among the wooden letters you used to smuggle everywhere. (Giving you away, they bulged like extra knees, so we made a game where I frisked you and guessed messages, and was always wrong.) Last night, awakened by the stress of legs against leather straps, I found you sleeping with the letter A in your right hand and the letter A in your left hand, the moon in your window bending close as the mirror in the doctor's headband. Were you dreaming your name? Xs like an alligator's grin, dots swarming from i's, the stinging tails of l's and c's? Daughter, our dreams are games that hold us to the earth. THOMAS REITER© Neptune, New Jersey
Commentary Playing the Cost-Containment Game WILLIAM 0. ROBERTSON, MD, Seattle, Washington
the midst of today's era of "cost containment," physicians are expected to play a major role. Many of us insist we do. After all, our actions and orders initiate the spending of some 80% of our nation's health care expenditures. But, to be successful, ought we not be familiar with the "costs" involved so that we, like consumers in the supermarket, can be "price conscious" as we go about our daily business? Just what evidence is there that we are adequately informed about costs to be sure we get heard? In 1975 Skipper and colleagues reported that as medical students evolve into physicians and as physicians gain experience, they become ever more accurate in their estimates of medical costs-diagnostic tests, drugs, procedures, and so forth. 1.2 Being a professional skeptic, I replicated their study in December 1976 and did so annually through 1987, for a total of 11 years. The process was simple: A survey form was distributed to all attendees at the Children's Hospital and Medical Center (Seattle, Washington) Grand Rounds, and all were implored to fill in the blanks with their best "guesstimates" of the costs of ten common hospital services. These included chest x-ray, neonatal intensive care daily charges, and throat culture; the specific items remained constant over the decade. Respondents also indicated their medical staff status-attending, resident, intern, fellow, or medical student. I then tallied the data, computing separate means for each of the ten items for each of the groups and the percentage of the responses that fell within +25% of the actual costs at the time of the actual study-again, by item and by respondent group. Each January, I reported back to the attendees the results-along with the actual costs involved-and drew considerable interest in the process. Moreover, I was fortunate in conducting this study as three "interventions" were introduced into our hospital operation: distributing copies of patients' bills to all members of the medical team involved in the care; posting an itemized price list on each of the clinical units; and adapting that price list to a user-friendly computer made available on each unit as the avenue of communication with the laboratory, radiology, medical records, and others. Naturally my null hypothesis was that none of these innovations would affect accuracy rates each subsequent December and that experience per se would also be of no consequence in enhancing the accuracy of cost estimates. Imagine my distress as the data that came in bore out those null hypotheses! Let me explain. Each year some 90 attendees completed each exercise, with at least 20 in each of the separate groups. Simply put, the mean guesstimates were not that far off targets, being within 10% of actual costs, but, consistently, less than a third of the respondents' guesses fell within Skipper and associIn
ates' gold standard of +25% of the actual cost. At no time during the ten years of the detailed study were the medical students' mean estimates significantly different from those of the other respondent groups, nor did their "spreads" (variance) differ from those of other groups. Moreover, as far as I could tell, each of the innovations was without notable effect-the means and spreads showed no significant changes during the years after they were introduced. So much for the bad news. There may also be good news.
When the means of all the respondents in any given year were totaled and compared with the totals of the actual costs involved, the differences averaged less than 5% for each of the ten years. Even more notable was the observation that over the decade, while the annual percentage increment of the "medical care component" of the federal consumer price index was 9.0% per year, that of the respondents' guesstimates was also 9.0%- 81.4% total for the former and 81.0% total for the latter!-suggesting that though the respondents were ignorant of the cost of specific items, they were surprisingly conscious of both global costs and inflation.`31'1 "So what? Is there any take-home message applicable to today's cost-containment game?" you might ask. I think so. Admittedly our samples were small and subject to bias; surely it would have been preferable had all the specialties been represented. But our data were remarkably consistent, with no internal conflicts over the span ofthe study. Nonetheless, replication would be highly desirable. In the meantime, let's all agree that we are, in fact, surprisingly ignorant of individual cost items and that we should be wary about sharing that ignorance with patients if we do not look up actual costs before reassuring them. "Don't shoot from the mouth when it comes to costs"-or should it be "charges"?especially as Representative John Dingell's investigations subcommittee of the House Energy and Commerce Committee has "exposed" the enormous but widely divergent markups prevalent throughout the medical care industry (M. C. Kimball and C. Havighurst, "House Panel Grills Humana," Health Week, October 21, 1991, vol 5, pp 1, 32). So, too, we need more precise information when we participate in negotiations or press conferences where we are presumed to be informed. Tierney, Ball, and others have argued that rather than push familiarity with costs per se, we would all do better to focus on "value."45 In truth, because value is a function of costs and benefits, access to cost data would still be essential to establish value. As Samuel Johnson said centuries ago,
"Men more frequently need be reminded rather than informed," which is surely the case with cost data. Today, with cost schedules changing almost daily, keeping up with such changes would seem mandatory if we as physicians are really
(Robertson WO: Playing the cost-containment game. West J Med 1992 Jul; 157:77-78) From the Department of Pediatrics, Children's Hospital and Medical Center and the University of Washington School of Medicine, and the Seattle Poison Center and Washington Poison Network, Seattle. Reprint requests to William 0. Robertson, MD, Children's Hospital and Medical Center, 4800 Sand Point Way NE, Seattle, WA 98105.
COMMENTARY
78
should, we as individuals or as members of the profession do anything to rectify the situation? Or is it too late to do other than give the appearance of doing something? Our data verified that physicians as a group have a surprising global knowledge of costs and a feel for changes going on around them. Now all we need is quick and ready access to specific bits of data to flesh out our capacity to help our patients and ourselves actually win the cost-containment game. Who will take the first step to get the job done?
serious when we proudly proclaim our efforts at cost containment. Without an awareness of these cost changes locally, how can individual physicians conceivably discharge any obligation to try to constrain medical cost escalation? So, too, on both the state and national levels, how can the profession profess to be making such an effort when its component organizations must be assumed to be comparably ignorant? At this point I admit to a bit ofbias and a tad of paranoia. I worry that our medical profession, individually and as a group, repeatedly finds itself in a defensive mode of trying to play catch-up on financial matters. Invariably we are forced to rely on data gathered and massaged by others. Frequently the whole process takes place well in advance of our opportunity to participate in any critical way or even to become familiar with the real meanings of the terms being used. This is hardly an ideal spot to be in, especially as the nation seems to be approaching some type of a "nationalized" health care program. Will a word to the wise be sufficient? Can, and
*
REFERENCES 1. Skipper JK, Smith G, Mulligan JL, et al: Medical students' unfamiliarity with the cost of diagnostic tests. J Med Educ 1975; 50:683-690 2. Skipper JK, Smith G, Mulligan JL, et al: Physicians' knowledge of cost: The case of diagnostic tests. Inquiry 1976; 13:194-199 3. Consumer Price Indexes. Washington, DC, Govemment Printing Office, 1988 4. Tierney WM, Miller ME, McDonald CJ: The effect on test ordering of informing physicians of the charges of outpatient diagnostic tests. N Engl J Med 1990;
322:1524-1525 5. Ball J [interview]: Better cookbooks needed to guide physicians. Hospitals 1988; 62:96-98
*
*
ALPHABET for Alicia Last night I bound you to the letter A. Your spine curving in the X-rays became the stack of blocks I built spelling your name, a father's wobbly trick and hope to hold you, laughing, to harness and frame-your first friend among the wooden letters you used to smuggle everywhere. (Giving you away, they bulged like extra knees, so we made a game where I frisked you and guessed messages, and was always wrong.) Last night, awakened by the stress of legs against leather straps, I found you sleeping with the letter A in your right hand and the letter A in your left hand, the moon in your window bending close as the mirror in the doctor's headband. Were you dreaming your name? Xs like an alligator's grin, dots swarming from i's, the stinging tails of l's and c's? Daughter, our dreams are games that hold us to the earth. THOMAS REITER© Neptune, New Jersey
