Sep 19, 2014

Interview Transcript

Interviewer: A study finds that when it comes to choosing health care procedures, cost matters. More next on the Scope.

Announcer: Examining the latest research and telling you about the latest breakthroughs. The Science and Research Show is on The Scope.

Interviewer: I'm here with General Pediatric Surgeon, Dr. Eric Scaife. Dr. Scaife, tell me about your study.

Dr. Scaife: It occurred to me that unlike many other parts of our economy, the consumers don't really understand the cost of medicine despite the fact that it represents about a quarter of our economy. And so as a pediatric surgeon one of the most common things that we deal with is pediatric appendicitis. We take out one or two appendixes a day. And we have two different ways of taking out your appendix. One with an open technique and one with a laparoscopic technique which requires specialty instruments. And the outcomes in children with non-perforated appendicitis turns out to be the same, but the cost is quite different. And so it presented a really unique model for us where we could have a procedure with similar outcomes, but a very big difference in terms of cost. And we thought why not allow the patients to consider the cost in terms of which operation they get.
Most of the time we actually make the decision for them. And so it would be an interesting experiment that a patient could actually behave like a consumer as they would in any other part of the market.

Interviewer: Right. And what kind of difference in cost are we talking about?

Dr. Scaife: So for our study the open operation was about $3,000 cheaper than the laparoscopic operation. And the primary difference there is that the open operation requires a scalpel and some sutures, and some instruments to provide exposure whereas the laparoscopic operation requires a number of gadgets, most of which tend to be disposable.

Interviewer: Does the patient end up paying a difference in cost?

Dr. Scaife: Well, this is where medicine gets really complicated and it's hard to peel out all of these differences, but I can tell you when I spoke with Primary Children's accountants, so basically their answer is that at the end of the day these are direct cost differences in terms of materials that are charged to the patient. So theoretically they should be exposed to that difference in cost. Whether or not that actually happens or not gets a lot muddier.

Interviewer: What were the results of the study? What did the patients decide?

Dr. Scaife: We randomized patients to either be exposed to just the difference in the procedures versus other patients that saw the difference in procedures plus the cost information. One of the interesting things that happened is that patients that weren't even exposed to cost information, some of them actually chose the open operation which speaks in some ways to sort of medical paternalism that the doctors believe that they understand what the patients want.
Some of the kids wanted the same scar, for example, that their brother had, felt that an open operation sounded cooler. And then these sorts of things we just had not anticipated. Once they were exposed to cost there was such a huge change that almost two-thirds of the patients that saw cost differences actually changed their minds and had an open operation.
Another way to think of that is that the year before we'd enter the study, let's say every time I'm on call I do one or two appendectomies. Our practice does about 500 a year. I had performed exactly zero open appendectomies.

Interviewer: Wow!

Dr. Scaife: I can't remember what the total count was afterward, but you can imagine if two-thirds are changing their minds suddenly I was doing a number of open appendectomies.

Interviewer: So that was a surprise.

Dr. Scaife: Yeah, that's right.

Interviewer: So what do you think accounts for that decision on the patient's side?

Dr. Scaife: I think one of the things is that we underestimate our patients as real consumers. So often times when I've had these conversations with other physicians, first of all, they want to debate about the differences between laparoscopic and open appendectomies, and that's really not the point. This was a point of it was a model that was designed to look at choice.

Interviewer: Right.

Dr. Scaife: And the second thing that physicians like to do is they want to debate about whether or not patients can really understand medicine when it's explained to them. And my argument has always been that we make a lot of decisions in the marketplace based upon things that we don't completely understand, but we make a measured judgment based upon what we perceive as quality and price, and value, and reputation.
And so the example I often give is that just about all of us own some sort of cellular phone. I would wager that none of us really understand our cellular phones, but we made a consumer decision to purchase those phones based upon those sorts of values.
And suddenly we put patients into the same position and I believe they made those decisions about open versus laparoscopic appendectomy. Kind of a simple model on the same sorts of things, reputation, what they'd heard of before, perceived value, and cost. Interviewer: Do you think this is something that should be put in place more often?

Dr. Scaife: I think the general feeling still is that the laparoscopic technique is the more modern technique, but it has driven us to look at the costs for our laparoscopic appendectomies and make them considerably cheaper. We're now using disposable instruments. We developed a unified instrument collection so that all of [inaudible 00:05:16] surgeons are using the same materials.

Interviewer: Interesting.

Dr. Scaife: And in the past each surgeon sort of had their own favorites and that led to incredible price variations. So there was certainly a reaction to that study.

Interviewer: Right. And are you more likely to talk about costs now with your patients?

Dr. Scaife: Well, I'm happy to talk about costs, but unfortunately remain ignorant of many of the costs. And I think Primary Children's Hospital was extremely generous in terms of their transparency and willingness to work with us on this project. I can certainly understand how an institution might be a little concerned about revealing what the different cost information is.
So I think as an organization, I'm quite pleased to be part of both the university effort and Primary Children's effort in terms of their willingness to approach this. And I think that's the sort of ethic that institutions need to take on if we're going to have thoughtful approaches to, as they say, bend the curve of economic inflation in terms of medical economics.

Interviewer: What do you think the implications of your findings are?

Dr. Scaife: Well, I think the most broad implication is that there is no engaged consumer in medicine because of the third-party payer system. And people will say when they look at this, "Well, the patients really weren't exposed to that cost because maybe their deductibles were too high and no one really would have seen a difference." But nevertheless, when exposed to a price difference people could make a pretty significant difference in terms of their decision.
And then you might actually expand it to say, "Well, what if there was a larger consumer?" For example, let's say General Motors and they could make a decision based upon different services provided at different institutions based upon cost and value perceptions. And I think that actually is happening in the marketplace. This just happens to be a relatively simple study that actually clarifies that point.
It's really interesting to me when I have discussions from sort of old college friends who are in business, this sort of study really perks their interests whereas often times you bring this study up with surgeons and they, again, want to get back to this debate about laparoscopic versus an open appendectomy. And it's almost as though we've been permanently clouded of this idea of what the real economic choices are where people in other fields who see economic choices on a daily basis get it almost instantaneously.

Announcer: Interesting, informative, and all in the name of better health. This is The Scope Health Sciences Radio.

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