Do your staff know the cost of pharmaceuticals and lab tests?
September 1, 1999 7 minutes read
Do your staff know the cost of pharmaceuticals and lab tests?
Reduce overutilization, cut costs, or risk your ED’s bottom line
Think your ED staff are informed about the cost of diagnostic tests and pharmaceuticals? Think again. Studies and anecdotal reports indicate that relying on physicians and other staff to keep down costs could leave your ED in the red. One hospital was able to reduce pharmacy costs by $75,000 per year by encouraging ED physicians to use a cheaper yet equally effective drug, but this type of proactive cost-cutting isn’t occurring in most EDs, say experts interviewed by ED Management.
"Physicians have an abysmally low level of understanding of costs," reports Grant Innes, MD, CCFP, FRCP, director of emergency medicine research at St. Paul’s Hospital in Vancouver, British Columbia. In one study, 75 ED physicians were asked to estimate the cost of 60 drugs, imaging techniques, and laboratory tests. The results were dramatic: 19% underestimated the cost of pharmaceuticals, 26% underestimated the cost of lab tests, and 65% underestimated the cost of imaging tests.1
Physicians tend to overuse tests and treatments that don’t improve patient outcomes, argues Innes, the study’s principal investigator. "Part of the reason is that they have no concept of the costs. Cost awareness is not part of medical training," he says.
Educating staff about costs can reduce utilization without harming patients, he emphasizes. Many tests are ordered by reflex or habit and have little or no impact on patient care, says Innes. "These tests do not need to be done at all. Many new technologies are used on a progressively increasing basis, despite little or no evidence that they actually help patients."
In many cases, old drugs work as well as new drugs, but new ones are selected because they are heavily marketed, he notes. (See story on how to counter marketing efforts by pharmaceutical companies, p. 102.)
In Canada, the availability and utilization of "high-tech" diagnostic tests is much less than in the United States, Innes reports. "Yet in general, Canadian patients do just as well, with lower per-patient utilization costs." In many instances, physicians should depend on their own clinical judgment instead of tests, he says. "They should have a better understanding of research methods and evidence-based medicine. We have some responsibility to cut costs where it won’t hurt patients."
Here are some ways to educate staff about costs and reduce unnecessary testing:
o Compare physicians with peers. An Emergency Department Information Tracking System (EDITS) software program profiles the number of tests ordered by every ED physician at San Gabriel Valley (CA) Medical Center. (See box, below.)
"The idea is to show them where they stand with regard to their peers," says Richard Bukata, MD, FACEP, medical director of the ED and associate clinical professor in the department of emergency medicine at Los Angeles County/USC Medical Center.
The program is used to capture all the charges for the hospital, as well as to profile frequency of ordering tests for individual physicians. "Although these are all board-certified doctors, we have seen substantial variation in their use of tests," says Bukata.
Anonymously comparing test utilization with peers is a strong motivator, he stresses. "Doctors don’t want to be outliers at either end of a bell-shaped curve. They want to be in the middle. Without that comparison, I don’t think you can get any kind of meaningful change in physician behavior."
The software reveals which physicians are ordering the most tests or using expensive pharmaceuticals. Utilization of tests is compared per 100 patients seen. "For example, it can tell you how many CT scans were done per 100 patients for each doctor," says Bukata. "We can assume my patients in general are as sick as yours, but my utilization of CT scans may be much lower than yours."
Variability in practice was demonstrated to ED physicians to get buy-in. "Nobody will disagree that it’s good medicine to start antibiotics in the ED for admitted patients or give aspirin to chest pain patients. So if you show physicians the variability in those things, you can move to areas where there is more likely to be some controversy, like ordering of lumbar spine X-rays," he says.
Without this kind of data, physicians may believe they are consistent with their peers when there are actually wide variations, Bukata notes.
o Educate physicians about the appropriate use of tests. Four commonly overused lab tests in the ED are blood alcohols, urine cultures, electrolytes, and blood gases, says Bukata. "Examples of overused X-rays are abdominal series, CT of the head, and lumbar spine series."
Educating physicians about when these tests are useful is key, stresses Innes. "Most health care providers know very little about diagnostic testing and wouldn’t be able to identify a predictive value or likelihood ratio if it hit them in the face," he says.
Come to a consensus among physicians about what is appropriate utilization, he says. "If they don’t buy into the concept from the start, you are doomed to failure."
o List costs of antibiotics on protocols. At Overlook Hospital in Summit, NJ, costs of antibiotics are listed on ED clinical pathways for pneumonia and neutropenia with fever.
"We have costs listed for drugs which are all equally effective and first choice, so that helps physicians to select the antibiotic," reports James Espinosa, MD, FACEP, medical director of the ED. In addition to reducing costs, the practice also improves consistency of care, he adds.
Unlike lab tests, antibiotics do offer a choice, notes Espinosa. "You don’t have a choice of three different [complete blood counts] to choose from, but you may have three equally good antibiotics," he explains. "If an expert panel feels they are equally good, then the cost becomes the only differential. So you are not sacrificing other outcomes for cost."
o Have staff guess costs of tests. At staff meetings, ED physicians at Overlook bid on the costs of various tests in a simulation of the game show "The Price is Right," which features contestants trying to guess the price of an item without overestimating the cost. "For example, we ask, What do you think a CBC is worth?’ I let people bid, and we spend a hilarious hour trying to see who could be the closest without going over," says Espinosa.
o Convince physicians to change the drugs they prescribe. In the ED at Good Samaritan Regional Medical Center in Phoenix, antiemetics frequently are used to reduce the side effects of pain medications, notes Todd Taylor, MD, FACEP, an attending emergency physician.
The three most commonly used medications are Compazine ($11/dose), Phenergan ($3/dose), and Vistaril (70 cents/dose). However, a lesser-known drug Inapsine (droperidol) is only 40 to 80 cents/dose, Taylor notes. Here is his comparison of the three drugs (best at the top, worst at the bottom):
| Effectiveness | Side effects | Cost |
| Inapsine | Vistaril | Inapsine |
| Compazine | Phenergan | Vistaril |
| Vistaril | Inapsine | Phenergan |
| Phenergan | Compazine | Compazine |
Of the four drugs, Vistaril may appear to be the best choice, because Taylor rates it the best in terms of side effects and second best in terms of cost, but it can have problems being given by IV and is less effective, he notes. "Of the remaining drugs, Inapsine clearly comes out on top, including the fact it is dirt cheap.’"
"After looking at the numbers of Compazine [the former drug of choice] use in our ED, we were able to reduce our pharmacy cost for this indication by about $75,000 per year by changing to a more effective drug with fewer effects, which was also less expensive drug: Inapsine," Taylor reports.
The challenge of making this change is that it requires someone to identify the alternatives, perform the investigation, and then educate the staff into adopting the "better" drug, he says. "The most difficult part is the last, and [it] took me two years."
Most physicians aren’t adventurous
People by nature continue to use what they know and are comfortable with, notes Taylor. "While intelligent, most physicians are not very adventurous and often resist change. The Compazine change was assisted by the fact that our hospital was not able to get it for several months due to a national shortage."
The doctors simply had no choice but to change, he reports. "Most of them never went back to using it."
The best way to get doctors to change is to simply take away the alternatives and provide a reasonable (if not better) alternative to the more expensive drug, Taylor advises. "You have to be careful, though, that the alternative offered has reasonably good science behind the switch or you will lose credibility."
o Use a computerized system to display costs of tests. A study showed that doctors who used a computerized order-writing system discharged patients on average one day earlier with medical bills $900 less than patients whose doctors used traditional pen and paper, notes Taylor.2
"The computer system had the additional advantage of warning doctors of potential drug interactions, patient allergies, and expensive’ treatments," he says. (See related story on a unique computerized system, p. 100.)
References
1. Grafstein E, Innes G, McGrogan J. Do emergency physicians lack knowledge of diagnostic and pharmaceutical costs? Abstract presented at the annual meeting of the Society for Academic Emergency Medicine. Chicago; May 1998.
2. Tierney WM, Miller ME, Overhage JM, et al. Physician inpatient order-writing on microcomputer workstations: Effects on resource utilization. JAMA 1993; 269:379-383.
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