01.13.14
A new study published in Health Affairs has found that the majority of surgeons know the cost of devices they implant in patients. The study, which was a collaboration between 10 researchers, found that while orthopedic procedures represent a large expense to the Medicare program, and costs of implantable medical devices account for a large proportion of those procedures’ costs, attending physicians could only accurately estimate the cost of the device 21 percent of the time. Among resident physicians, the percentage was even less at 17 percent.
The impetus for the study was the healthcare policy-related push for physicians to consider cost in the selection of devices, but several factors make acquiring cost information difficult. Thirty-six percent of physicians and 75 percent of residents rated their knowledge of device costs “below average” or “poor.” However, more than 80 percent of all respondents indicated that cost should be “moderately,” “very,” or “extremely” important in the device selection process. The researchers concluded that surgeons need increased access to information on the relative prices of devices and should be incentivized to participate in cost containment efforts.
An excerpt from the paper stated: “…Most respondents indicated that cost should play an important role in the selection of devices. However, actual knowledge of device costs was low among attending physicians and residents alike. This was true even though our survey asked about common orthopedic devices, used institution-specific vendors and pricing, and excluded disposable components and other nonimplanted items. …The actual cost of each device was determined at each institution; estimates within 20 percent of the actual cost were considered correct.”
“In orthopedic surgery, we’re never told how much things cost,” said Kanu Okike, M.D., lead author of the study and orthopedic surgeon at Kaiser Permanente Moanalua Medical Center in Honolulu, Hawaii. “We never see the cost displayed anywhere, and even if you were interested, there’s no great way to find it.”
Part of the problem with price opacity is the wild disparity in price sometimes seen for the same devices. For instance, according to the National Institute of Health, a total knee replacement can cost anywhere from $1,797 to $12,093, depending on the negotiated price. Okike said there is little evidence in any difference in quality in relation to price.
While hospitals do have an incentive to ask surgeons to use cheaper devices (the copst of the device does not change what Medicare will pay for the procedure), they often do not pressure surgeons to choose one device over the other. Orthopedic surgeons are big money makers for hospitals, so hospitals are reluctant to dictate terms to them.
“[Hospitals] don’t want to offend the doctors,” explained Kevin J. Bozic, M.D., an orthopedic surgeon at the University of California San Francisco, Calif., who studies the cost of medical devices. “They cater to them however they can, which includes not telling them which devices to use.”
Okike said that the root of the problem is the lack of cost transparency industry-wide, which will not change any time soon without direct pressure from lawmakers.
The impetus for the study was the healthcare policy-related push for physicians to consider cost in the selection of devices, but several factors make acquiring cost information difficult. Thirty-six percent of physicians and 75 percent of residents rated their knowledge of device costs “below average” or “poor.” However, more than 80 percent of all respondents indicated that cost should be “moderately,” “very,” or “extremely” important in the device selection process. The researchers concluded that surgeons need increased access to information on the relative prices of devices and should be incentivized to participate in cost containment efforts.
An excerpt from the paper stated: “…Most respondents indicated that cost should play an important role in the selection of devices. However, actual knowledge of device costs was low among attending physicians and residents alike. This was true even though our survey asked about common orthopedic devices, used institution-specific vendors and pricing, and excluded disposable components and other nonimplanted items. …The actual cost of each device was determined at each institution; estimates within 20 percent of the actual cost were considered correct.”
“In orthopedic surgery, we’re never told how much things cost,” said Kanu Okike, M.D., lead author of the study and orthopedic surgeon at Kaiser Permanente Moanalua Medical Center in Honolulu, Hawaii. “We never see the cost displayed anywhere, and even if you were interested, there’s no great way to find it.”
Part of the problem with price opacity is the wild disparity in price sometimes seen for the same devices. For instance, according to the National Institute of Health, a total knee replacement can cost anywhere from $1,797 to $12,093, depending on the negotiated price. Okike said there is little evidence in any difference in quality in relation to price.
While hospitals do have an incentive to ask surgeons to use cheaper devices (the copst of the device does not change what Medicare will pay for the procedure), they often do not pressure surgeons to choose one device over the other. Orthopedic surgeons are big money makers for hospitals, so hospitals are reluctant to dictate terms to them.
“[Hospitals] don’t want to offend the doctors,” explained Kevin J. Bozic, M.D., an orthopedic surgeon at the University of California San Francisco, Calif., who studies the cost of medical devices. “They cater to them however they can, which includes not telling them which devices to use.”
Okike said that the root of the problem is the lack of cost transparency industry-wide, which will not change any time soon without direct pressure from lawmakers.
