A new study from Health Affairs found only 19 percent of physicians and residents could correctly estimate the prices of 13 common orthopedic devices.
The study was conducted between December 2012 and March 2013 in the orthopedic departments of medical centers at the following seven institutions: Duke University in Durham, N.C., Harvard University in Boston, the University of Maryland in Baltimore, Mayo Clinic in Rochester, Minn., the University of Pennsylvania in Philadelphia, Stanford (Calif.) University and Washington University in St. Louis. Of the 503 respondents, 217 were attending physicians and 286 were residents.
The study focused on 13 common orthopedic devices, seven of which were standalone devices such as a total hip arthroplasty device and a spine pedicle screw construct. The actual cost of each device was defined as the amount paid by the institution to the vendor, and costs were determined institution by institution. Study participants were asked to estimate the cost of each device, or the "contract price representing the amount your institution currently pays the vendor," according to the study.
Among residents and attending physicians, the percentage of device costs that were correctly estimated was 19 percent. Cost knowledge was greater for devices that the physicians used regularly, but physicians tended to overestimate the price of low-cost devices and to underestimate the price of high-cost ones, according to the study. The study authors said this behavior has "important practical implications," as physicians may underestimate the amount of money that could be saved by choosing a low-cost alternative.
Here are some other important study findings:
• Attending physicians correctly estimated the cost of the device 21 percent of the time, while residents correctly estimated the cost of the device 17 percent of the time.
• 36 percent of physicians and 75 percent of residents rated their knowledge of device costs as "below average" or "poor."
• More than 80 percent of all respondents indicated cost should be "moderately," "very," or "extremely" important in the device selection process.
The authors noted several obstacles to greater price transparency for orthopedic devices. Many medical device companies regard pricing information as confidential and most contracts with hospitals include clauses that restrict cost disclosure. Pricing for any given device can also vary from one hospital to another, and device costs can fluctuate greatly over time even though hospitals' purchasing agreements often span multiple years. And "perhaps most important," according to the study authors, is that most orthopedic surgeons do not have incentive to learn the costs of the devices they use.
Still, they note that some institutions are working around these roadblocks. "One possibility is publicizing relative cost information. The University of Maryland Division of Orthopaedic Trauma is in the process of implementing such a strategy to decrease device costs and increase value," according to the study. "The division categorizes devices used in commonly performed procedures as red, yellow or green based on their relative prices, and this information is posted in the operating room as a guide for the surgeon."
But awareness of prices is only one part of a solution, according to the study. Authors said surgeons must be given incentives to make clinical decisions informed, in part, by knowledge of costs.
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Unveiling the Cost of Care: How Transparency Changes the Patient Perspective