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August 20, 1973

Use of Laboratory Tests and Pharmaceuticals: Variation Among Physicians and Effect of Cost Audit on Subsequent Use

Author Affiliations

From the Department of Medicine, the George Washington University Medical Center, Washington, DC.

JAMA. 1973;225(8):969-973. doi:10.1001/jama.1973.03220360029007

Variation in costs of laboratory and drug use was audited among 33 faculty internists caring for a homogeneous population at a university clinic. Variation was more extreme for laboratory (17-fold) than for drug use (fourfold). Laboratory and drug costs per physician were significantly correlated (P<.05). There were no predictive characteristics permitting identification of "high cost" or "low cost" physicians. Distribution of the results of the cost audit was followed by a 29.2% decrease in laboratory (P<.01) and a 6.4% increase in drug expenditures. Decreases in laboratory (P<.01) and drug use were greatest among high-cost physicians. The extreme variation observed in costs of care emphasizes the need to relate costs to quality and efficiency. The cost audit may be an effective means of decreasing the utilization of laboratory tests.