I don’t know what your healthcare costs

… and I’ll bet your doctor doesn’t, either.

Okay, that’s is a bit of an overstatement.  I know what my little bit of my patients’ healthcare costs are.  I know what my practice charges for office visits and vaccines and such.  I know the ballpark costs of the generic versions (which I prescribe almost exclusively) of a few common medications.  But that’s about it.  I don’t know the price of x-rays, CT scans, most blood tests or what the various subspecialists charge for their consultations.

I suspect many of my patients (or, more aptly, their parents) don’t know what their healthcare costs are, either.  For those whose insurance coverage doesn’t have a high deductible, they may see no more than whatever their copay is.  If they’re like me, they may be shocked when, after all the wrangling is done between the insurance company and whatever entity provided the service (lab, radiology department, physician, etc.), they receive a bill for rather more than they would have expected.  (Yes, it most certainly happens to me, too.)  The more of a buffer provided between the patient and the costs (or, if you prefer, the better the coverage) the more ignorance the former has about the latter.

Now, you might think it’s for the birds that I don’t know how much various healthcare menu items cost.  I would be inclined to agree with you.

Part of the problem is that there is no set price for a CT scan or any particular blood test.  Two different hospitals quite probably charge different amounts for the same services.  To an extent, that’s understandable.  When I order certain tests (like an MRI), I’m not just ordering the study but also requesting that a radiologist (or, for other kinds of test, a pathologist or other specialist) interpret the study and give me an impression.  While I can usually see the images if I choose to, I lack the expertise to decipher much of it: I’m reasonably good at reading x-rays, not so hot at CT scans, and worthless at everything else.  Since what your doctor really wants is the interpretation and not the test per se, hospitals that can reasonably claim to have better radiologists reading the studies can reasonably charge more for their services.

However, given that my practice only ever orders anything through one or the other of the two hospitals where we’re all on staff, it would be no great shakes to find out how much the charge is for a variety of commonly-ordered tests.  I will probably make inquiries to that end soon, for reasons I will get to in a minute.  But the truth is that I was never taught much about what the cost of anything was.  It was a gigantic lacuna in my medical education.  And I’m guessing my experience is the norm, not the exception.  Again, to a large degree this is understandable.  We’re trained to detect, diagnose and treat or prevent illness.  We’re taught what sorts of investigations and interventions accomplish this best.  If a biopsy is the best test, then it’s the best test whether or not it’s more or less expensive than a less reliable one.  If you’re taught that patient care is the only true consideration, then cost isn’t a factor in your decision-making.

Of course, the real world doesn’t work that way.  As anyone who has glanced at a newspaper in the past several years can tell you, healthcare costs are a huge problem in this country.  For good or ill (and my guess is that it will be a little bit of both), medical providers are going to have to pay more attention to the expense of the care they’re providing.  I’ve written before about global payment models as an alternative to the current feee-for-service arrangement, in particular about Children’s Hospital Boston’s decision to get out in front of the trend by agreeing to try using such a model with one of the major insurers in Massachusetts.  [Full disclosure:  I am on staff at CHB.]  A major teaching institution and research facility like CHB is a good laboratory to see how this model works in real life for a couple of reasons.

First (as I said in my previous post), CHB is an ideal environment for costs to skyrocket.  It’s packed to the rafters with specialists and subspecialists and subsubspecialists, all of them world-class.  (In the ecosystem of CHB, I hover around about the level of plankton.)  It is remarkably easy, and thus very tempting, to get lots of consultations to make sure you’re not missing anything.  The same holds true of just about any test you’d want to order.  If you want it, it’s there.

But Children’s and similar teaching hospitals are also the ideal setting for making lasting changes.  It’s where medical students and residents learn how to be doctors.  If they can be made aware of how to consider the expense of what they’re ordering, perhaps they will be less prone to take a shotgun approach to patient care and will be more discriminating when choosing what their patient truly needs.  And they’ll take that perspective with them when they find jobs around the country.

However, in order to really make a dent in healthcare expenditures it’ll take more than one hospital to adapt to the undeniable need for cost-consciousness.  A couple of weeks ago Pauline Chen wrote a column for the Times about a nascent program to provide educational materials for medical students about how to incorporate expense into their decision-making process:

Over the last two years, Dr. Neel Shah, a senior resident in obstetrics and gynecology at Brigham and Women’s Hospital in Boston, has been collaborating with medical educators and health care economists at Harvard Medical School and at the Pritzker School of Medicine at the University of Chicago to create a series of videos and educational materials designed to help medical students and doctors-in-training learn to make clinical decisions that optimize both quality of care and cost. With support from the American Board of Internal Medicine, these educational modules, called the Teaching Value Project, could represent a significant breakthrough in how medical students learn to be conscious of costs.

The patchwork of payment patterns that mark the American medical system makes it particularly difficult to teach young doctors. Net costs for treatments and medications vary depending on region, payer and even specific hospitals, so medical students and trainees often end up learning what is relevant only to their particular workplace. They might learn to prescribe a certain drug for diabetes because it is cheaper in their hospital formulary, only to discover later that the reverse is true in a different hospital or after policies have changed.

“When learning is haphazard like this, it’s hard for young doctors to see the entire picture,” said Dr. Vineet Arora, an assistant dean at Pritzker who is working on the Teaching Value Project.


The Teaching Value Project uses a rough pricing hierarchy rather than exact dollar figures to gauge costs, similar to the approach at well-known restaurant or travel search sites, which helps young doctors avoid getting mired in price variations and hairsplitting details. When combined with the project’s lessons on common cost errors that doctors make, the pricing hierarchy can bring clarity to clinical decisions.

For example, a young doctor might plan on ordering an ultrasound of the heart, or an echocardiogram, for an otherwise stable patient in the hospital because the wait for inpatients is shorter. But if that doctor also knows that echocardiograms are much less expensive when administered to outpatients, he or she might instead decide to wait and order it after discharge.

Any honest medical provider will tell you that there is plenty of room for trimming expenses that won’t harm patient care.  But there are lots of areas of gray.  Should I tell parents when I order an x-ray how much it costs, and that they may get a bill later depending on the vagaries of their insurance plan?  What if they’re on a tight budget, but the kid really needs the x-ray?  Should I be more liberal with tests requested by anxious parents if I don’t really think they’re necessary but I know the parents can and will cover the cost?  I’ve asked similar questions before, but they’re only going to become more pressing as time goes by.  Healthcare costs accounted for 17.6% of GDP in 2009, and this figure is only expected to grow over the coming years.

Giving medical students information about how to practice medicine in this kind of environment, where patient care must be balanced with expense, is a worthwhile endeavor.  I hope the Teaching Value Project is a great success.  That this kind of information isn’t included in medical education really is ridiculous, and hopefully other efforts will also be undertaken to impart similar skills to those of us who have been out of medical school for a while.

Since my practice is affiliated with Children’s, I have no doubt that I’ll be hearing a lot about this in the coming months whether I like it or not.  In the meantime, I’m going to find out how much a CT scan costs.

Russell Saunders

Russell Saunders is the ridiculously flimsy pseudonym of a pediatrician in New England. He has a husband, three sons, daughter, cat and dog, though not in that order. He enjoys reading, running and cooking. He can be contacted at blindeddoc using his Gmail account. Twitter types can follow him @russellsaunder1.


  1. Six or seven years ago, my physician prescribed me 30 Vioxx tablets, for something pretty trivial (if I remember correctly, some joint pain that accompanied a flu). When I took her prescription to the pharmacy, they wanted $98 bucks. I called my doctor, and asked her if I really needed Vioxx. She was as shocked by the price as I was. So, instead, she prescribed me 30 Tylenol, for 4 bucks, I think.

    Part of the reason that our American medical system is so expensive and so crappy in many ways is that the parts are not connected. My doctor had no idea what brand medications cost; and since she received most of her ongoing “education” on medications from drug company reps, she was much more inclined to prescribe a current, expensive, patent-protected medicine. Similarly, diagnostic testing and imaging vary widely–I have a friend who recently got a heart scan, and was shocked that the pre-insurance price was $1,800. He was further shocked to find that the same radiology center advertises the very same scan in the local paper for $300.

    We have a medical system built upon millions of small entrepeneurs, each determined to maximize their own profit, and each of whom has learned that the less transparent the system, the more they are likely to make.

  2. Any honest medical provider will tell you that there is plenty of room for trimming expenses that won’t harm patient care.

    My parents are doctors and they tell me that their american counterparts tend to over-test and go for the high tech test rather than a low tech, but equally effective alternative.

  3. I wonder, though, how motivated providers will be to cut costs for an insurance company rather than a patient whose money they are saving. If you know that X is slightly better than Y, but X is much more expensive than Y, if an insurance company is paying you might still try to recommend X for your patient, while if they patient is paying out of pocket, you are then motivated recommend Y.

    • This is indeed part of the problem, and what I would hope programs like the one described in the Times article are designed to address.

      And insurance companies are growing increasingly balky about paying for slightly better but much more expensive interventions, which is why global payment models are getting some sunlight these days.

  4. As a point to start I have seen bills for CT scans that combine the services related to the procedure at a cost of around $10,000.

    • I remember being a mite surprised when I was accidentally billed for an ambulance ride that transferred my son from one hospital to another that was less than 5 minutes away. It was $1500.

      I was also a mite surprised at the habit of companies that make medical equipment, upon hearing your insurance denied you, to offer to sell you the equipment out of pocket at literally half the price.

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