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Original Investigation
April 9, 2007

Physician Consideration of Patients' Out-of-Pocket Costs in Making Common Clinical Decisions

Author Affiliations

Author Affiliations: Center for Studying Health System Change, Washington, DC (Drs Pham and O’Malley); MacLean Center for Clinical Medical Ethics and the Division of General Internal Medicine, University of Chicago Hospitals, Chicago, Ill (Dr Alexander).

Arch Intern Med. 2007;167(7):663-668. doi:10.1001/archinte.167.7.663

Background  Patients face growing cost-sharing through higher deductibles and other out-of-pocket (OP) expenses, with uncertain effects on clinical decision making.

Methods  We analyzed data on 6628 respondents to the nationally representative 2004-2005 Community Tracking Study Physician Survey to examine how frequently physicians report considering their insured patients' OP expenses when prescribing drugs, selecting diagnostic tests, and choosing inpatient vs outpatient care settings. Responses were dichotomized as always/usually vs sometimes/rarely/never. In separate multivariate logistic regressions, we examined associations between physicians' reported frequency of considering OP costs for each type of decision and characteristics of individual physicians and their practices.

Results  Seventy-eight percent of physicians reported routinely considering OP costs when prescribing drugs, while 51.2% reported doing so when selecting care settings, and 40.2% when selecting diagnostic tests. In adjusted analyses, primary care physicians were more likely than medical specialists to consider patients' OP costs in choosing prescription drugs (85.3% vs 74.5%) (P<.001), care settings (53.9% vs 43.1%) (P<.001), and diagnostic tests (46.3% vs 29.9%) (P<.001). Physicians working in large groups or health maintenance organizations were more likely to consider OP costs in prescribing generic drugs (P<.001 for comparisons with solo and 2-person practices), but those in solo or 2-person practices were more likely to do so in choosing tests and care settings (P<.05 for all comparisons with other practice types). Physicians providing at least 10 hours of charity care a month were more likely than those not providing any to consider OP costs in both diagnostic testing (40.7% vs 35.8%) (P<.001) and care setting decisions (51.4% vs 47.6%) (P<.005).

Conclusion  Cost-sharing arrangements targeting patients are likely to have limited effects in safely reducing health care spending because physicians do not routinely consider patients' OP costs when making decisions regarding more expensive medical services.