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Study Finds Least-Experienced Physicians Spend Most When Treating Patients

By Caitlin McGlade, CQ Staff

Physicians new to the profession rack up higher costs than their more-experienced counterparts, according to a study released by the RAND Corporation.

Published in the November edition of Health Affairs, researchers found that physicians with fewer than 10 years of experience accumulated 13.2 percent higher overall costs than physicians who have worked for 40 or more years.

The findings, which looked at Massachusetts insurance claims from 2004 and 2005, might not bode well for the least-experienced physicians now practicing under the scrutiny of quality and resource utilization reports, which are calculations that Medicare and commercial health insurance companies are increasingly making to compare the scope and cost of resources that individual doctors use when treating a patient.

A law passed in 2008 (PL 110-275) required the Centers for Medicare and Medicaid Services (CMS) to provide such reports to doctors. Now, CMS is using a round of reports issued to doctors in groups of 25 or more in nine states to preview value modifier proposals—which the health care overhaul requires Medicare to phase in and apply to Medicare fee-for-service payments starting in 2015.

"I was actually quite surprised that the younger physicians did have higher costs," the study's author, Ateev Mehrotra, said during an interview. "When we talk about what's driving health care spending up, we talk a lot about defensive medicine. I thought what I would find was that physicians who had been sued would practice more defensively, and they'd be more expensive."

Mehrotra had also hypothesized that doctors working in smaller practices would incur higher costs because larger practices have more resources at their disposal.

"We didn't find that," he said.

Instead, they found what Mehrotra could only attribute to a difference in practice methods, perhaps born of the type of training residency programs teach today that they weren't decades ago. For example, young physicians might be more familiar with new types of positron emission tomography (PET) scans, and thus be more likely to order them for a patient, he said. PET scan costs range from $850 to $4,000, according to the Society of Nuclear Medicine and Molecular Imaging.

Mehrotra's research points out that the medical training difference theory is only a suggestion, and the team cannot be certain what mechanisms are driving the spending gap. His study also did not assess quality of care between the cost differences.

"There have been some calls recently that we need to add to our residency school training a more judicious use of resources," Mehrotra said. "Our paper might accelerate that kind of training."

Molly Cooke, who heads the University of California, San Francisco Academy of Medical Educators, is one of the leading voices calling for such a change. She published a paper in the New England Journal of Medicine in 2010 pointing out medical education curricula's "silence" on the role of cost while planning treatment strategies.

"The idea in American medicine is that more is always better," Cooke said, adding that this is not always true.

In 2010 she suggested that the medical community should stop "hiding behind the myth" that every doctor should call for unlimited resources to treat every patient for even minimal potential benefits. She also wrote that doctors should assess the cost value of treatments, and that medical training programs should broaden their curricula to expose fledgling doctors to health care management and health services delivery.

More Focus on Costs

But just two years later, much is different. So much so that Joanne Conroy, chief health care officer at the Association of American Medical Colleges, said Mehrotra's findings might look different if he studied doctors coming out of school today.

The study surveyed insurance claims from 1.13 million Massachusetts-based patients between the ages of 18 and 65 from 2004 and 2005. Researchers broke up the claims into ailment groups and compared how much it cost doctors within a pool of about 12,000 to treat the problem, from first visit to follow-up appointment. The doctors in the group, all Massachusetts-based, were mostly male, board certified and educated in the United States.

Mehrotra plans to further his studies by including a larger study area.

"Since then, there's been really a very heightened focus on actually training residents not only how to work in medicine, but understanding resource utilization," Conroy said during an interview. "And we're even having discussions about when it is important not to do something."

The Accreditation Council for Graduate Medical Education now stipulates that post-medical school training programs accredited by the council must teach an understanding of the financial end of medical tests and prescriptions. The ABIM Foundation launched a "Choosing Wisely" campaign that outlines five common and costly tests or procedures whose necessity should be considered. The American College of Physicians, triggered by an Institute of Medicine report that revealed about 30 percent of health care costs are spent on avoidable treatment processes, developed a curriculum centered around analyzing actual patients' hospital bills.

Cooke said the Massachusetts health care law and the federal overhaul (PL 111-148, PL 111-152) necessitated these industry shifts, which has created a vastly different climate in residency training programs than what she experienced during her training decades ago.

"To broaden access was quite obviously forcing the cost questions," Cooke said. "But we were taught [in school] that it was incorrect for physicians to consider cost in devising diagnostic and therapeutic treatment for patients, so I wanted to reopen that question and say, 'Is this really true?' "

Cooke said she's not "as optimistic" as Conroy about the results of cost-analysis training having as significant of a difference already between 2004 and 2005 and now. The dynamic between doctors and patients will need to change, she said.

"Patients have become—and overall I think this is a good thing—more activist about their care," she said. "Physicians are much more frequently confronted by a patient who's ripped an ad out of a magazine or seen an ad on TV that says 'Talk to your doctor about, say, male pattern baldness.' I don't think we have really taught very well how to manage that. . . . I remember being sort of shocked when we began to see what were obviously direct advertisements encouraging patients to ask for specific medications. When I went to medical school that absolutely didn't exist."

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