New Data Highlights Provider Spending Habits That Impact High Hospital Bills
Amidst various initiatives to make healthcare bills less mystifying, educating providers on their spending habits may have a positive impact. A major factor contributing to the cost of care is what type of spender a patient’s provider is, according to new data released by IllumiCare.
IllumiCare’s research found thousands of dollars in disparities among providers of the same specialties taking care of the same type of patients, both across different hospitals and within the same hospital. The variations stem from costs providers make judgement calls about — such as ordering medications, lab tests and radiological exams.
Previous research in the Journal of American Medical Association was limited to hospitalists and internal medicine providers. It found that health care spending varies even more across individual physicians within the same hospital than it varies across different hospitals. IllumiCare’s analysis covered all subspecialties and sheds new light on cost variation in more targeted specialties such as cardiology and pulmonology.
IllumiCare presents costs, risks, and other key data in the clinical workflow using the Smart Ribbon platform, a floating ribbon of cost and risk data that unobtrusively overlays a hospital’s EMR. The data comes from dozens of acute care hospitals across the country. IllumiCare collected data about the wholesale cost of every order for a medication, lab, and radiology test, who ordered it (by provider/type) and the patient’s acuity.
The company’s Cost Variation eReport found substantial spending differences within providers working in the same specialty and on the same type of patients, including:
- A $5,438 variation between the 25th and 75th percentiles among pediatric hematology-oncologists
- Nearly a $3,000 difference among OB/GYNs between the 25th and 75th percentiles among vaginal deliveries without a complicating diagnosis
- A difference of $3,885 between the 25th and 75th percentile range of spending for OB/GYN orders of Cesarean Sections without complications or comorbidities.
While every patient and procedure has unique needs, vast cost variations on standard procedures without complications should be alarming to the health system. Moreover, providers need to understand how their own practice patterns differ from peers.
The report outlines the 15 sub-specialty/diagnosis-related group combinations with the largest cost variations. When costs are scaled to reflect the disparities between different diagnosis-related groups, cardiology and OB/GYN specialists showed the greatest variation. The study found these variations stem from differing practice patterns among providers in the same sub-specialties — for instance, in which medications they prescribe.
“These spending disparities ultimately impact patient bills and affordability of care, particularly with patients carrying greater responsibility for their healthcare costs in recent years,” said G.T. LaBorde, CEO of IllumiCare. “We built the Smart Ribbon to increase transparency for providers, who have been historically navigating care decisions without insight into cost. Bringing awareness to cost variation and providing a tool that allows providers to make more judicious decisions at the point of care promotes a culture of clinical stewardship that can greatly impact over utilization.”