Canadian doctors oblivious to costs of prescribed drugs

Apr 23 2004

Seventy-three per cent of the doctors surveyed could not estimate the costs of their orders to patients within 25 per cent of the actual costs. And not only do they not know the costs, in many cases they are "wild" in their guessing, says Dr. Michael Allan, a professor in the U of A Department of Family Medicine and a co-author of the study. The research involved analyzing the survey responses of 259 doctors in British Columbia.

In particular, doctors underestimated the costs of lab tests. The major cost of a single laboratory test is the one time cost of phlebotomy—the act of drawing blood—and the Primary Base (up front) fees.

Thus, it may be less expensive to order all anticipated tests in a group so that you only pay the phlebotomy and Primary Base fees once rather doing what is commonly taught in medical schools, which is to order one or a few tests and then order more tests based on those results. In the latter case you would have to pay the Primary Base fee every time new tests are ordered, Allan said, adding that further research is needed to identify if either approach is superior in cost saving or patient outcomes.

"But we do know that small ticket items like laboratory tests are high volume and a large expense to health care," he added.

According to the study, doctors also underestimate the costs of expensive drugs while overestimating the cost of inexpensive drug, demonstrating they have little understanding of the often dramatic difference between the two. Without understanding the significant difference between the price of some drugs, physicians may be more easily swayed by the pharmaceutical industry to prescribe more expensive drugs, even when those drugs often offer no clinical advantage. In light of the fact that pharmaceuticals are the fastest growing cost in health care, this area requires further attention, Allan said.

Allan added that past research shows doctors want more cost information, and that if they had this information it would modify their prescribing and reduce costs. Although techniques like academic detailing and cost reminders in computer based health records or drug information resources can be effective in reducing costs without imposed limitations, governments frequently opt for restrictive formularies (meaning drugs prices are not included in the listings) and limiting funding for cost education for doctors.

Another barrier to educating doctors of the costs of health care, Allan noted, is that the pharmaceutical industry would be reluctant to support the addition of cost information within drug information resources, like the Compendium of Pharmaceuticals and Specialties (CPS).

"I think the accurate knowledge of health care cost is, for all intents and purposes, not possible. Education programs will have limited success for a host of reasons," Allan said. "Instead, cost information should be more readily available to allow physicians to consider cost at the time of ordering."

"Reducing the costs of health care is obviously a vitally important issue, and one that deserves further study," Allan added.