DOCTORS AS COST GENERATORS: THE POWER OF THE SUB-TOTAL IN OUR EXPERIMENT OF N=1

Posted on in General

Last week, I was walking down Howland Avenue in the Annex on a sunny spring day. There on the sidewalk were some books put there for strangers. So I glanced at the titles. One that struck me was ” Doctors’ Decisions and the Cost of Medical Care”. So I took it.

The first part that I read was the summary. Why spend hours figuring it out if you can start with the summary. Usually works.

So Dr John M. Eisenberg , the author, stated that there are six ways of altering doctors’ practice patterns and therefore, changing the costs that they generate through their medical decisions.

The six ways include: education, feedback, participation, administrative rules, incentives and penalties. His conclusion is that an orchestrated combination is likely to be more successful.

Most participants in the healthcare sector recognize that medical care costs are a problem. And the doctors’ decisions act as cost generators.

Dr Eisenberg concluded that in the future ( after the publication of the book in 1986), all of the factors listed above will be important in slowing the growth of healthcare costs.  He describes the “black box” of medical decision making which does have windows through which decisions that drive costs might be influenced.

I have tremendous respect for this work. So we tried our own experiment in influencing medical costs.

Case Study:

A 79 year old male patient from Canada was admitted to a hospital in Florida because of a medical emergency. He required surgery. He was treated in the surgical intensive care unit of the hospital. Unfortunately, he did not have travel health insurance. He could not purchase it because of a prior hospitalization. RCM was retained to assist.

The experiment (N=1) that we did extended the work of Dr John M. Eisenberg. We asked the billing office of the hospital for the sub-total.  It was over $200,000. So we informed the treating doctors of the sub-total. Their decisions had been somewhat responsible for the bill. The result of this feedback was that they moved the patient out of the surgical ICU which cost $3,000 per day and into a regular room costing $1,000 per day. So the experiment seemed to work. We were able to use information about cost to modify the doctors’ decisions without harming the patient.

Our big idea is that if the doctors are given the sub-total of costs generated by their decisions every day for patients in hospital or actively involved in a care process, then the total costs of care are likely to be decreased in a material way without detriment to the patient.

Now to spread the word.