Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

Value-Based Care News

Healthcare Costs Concerns Impact Provider Rationing Behavior

A study found that more than half of providers rationed some medical services from patients because of healthcare costs in the past six months.

By Jacqueline Belliveau

- It is not uncommon to hear patients say that healthcare costs are going up, especially as more individuals enroll in high-deductible health plans. But, some providers oftentimes question if they should be responsible for helping to control costs.

Physicians report withholding medical services because of healthcare costs

For some providers, rationing certain healthcare services based on patient affordability has been a viable option for decreasing healthcare spending.

According to a recent survey in the Journal of General Internal Medicine, more than half of physicians reported that they have withheld some medical interventions from patients because of healthcare cost concerns in the past six months.

“This study highlights the challenging nature of being a physician in the United States with regard to resource utilization,” explained the authors of the study. “Every day clinical decisions involve complex issues, often requiring a series of subtle judgments by an individual physician for each patient (and the patient’s family), which collectively add up to tremendous costs or cost savings.”

While a majority of providers participate in some form of healthcare rationing, most limit it to medical services with small benefits, explained the study. The clinical services that are frequently withheld are prescription drugs (48.3 percent) and MRIs (44.5 percent).

The study explained that these may be the most withheld services because MRIs are expensive in outpatient practices and oftentimes require prior authorizations, while prescription drugs are usually reimbursed using a separate payment system and are subject to input from pharmacy benefit managers.

In contrast, more intensive services are the least likely to be rationed. Treatments that were less likely to be rationed included referrals to intensive care units (10.9 percent), surgery (20.2 percent), and hospital admission (18.8 percent).

However, most of the respondents explained that they do not frequently withhold treatments and less than five percent reported daily rationing behaviors.

On average, one-third of physicians stated that they ration prescription drugs and one-fourth ration MRIs at least monthly.

Researchers also found that specialty, political leaning, and practice setting were the primary drivers behind healthcare rationing.

For example, surgical and procedural specialists were significantly less likely to report withholding medical services based on cost concerns than primary care physicians. The study explained that specialists who are “further downstream in care may have less ability, incentive, or need to ration.”

Similarly, the survey showed that physicians that identified themselves as holding liberal views were less likely to ration healthcare services.

In terms of practice setting, researchers revealed that small or solo practices were more likely to report rationing behavior than physicians in medical groups or health maintenance organizations. Researchers attributed this trend among solo practices to the “ration-by-proxy” phenomenon.

“Physicians become rationing agents of insurance companies because of the paperwork burden and excessive hoops of prior authorizations or excessive out-of-pocket costs that are set up by payers and pharmacy benefit managers,” the study explained.

“Solo practitioners have fewer resources to deal with the paperwork and other barriers; it may be easier not to make the effort in the first place when they know that their efforts will likely be in vain or will not be compensated.”

Despite the majority of physicians exhibiting rationing behavior, there was still a negative connation to the word “rationing.” Some providers stated that helping to reduce patient out-of-pocket expenses by withholding services did not constitute healthcare rationing.

The study explained that there is a complex relationship between behavior and attitude with healthcare rationing, which could indicate more subconscious influences of clinical decision-making. However, healthcare costs were one of the significant factors in making healthcare decisions for providers.

“These decisions are faced several times per patient encounter within the context of larger decisions about inpatient vs. outpatient treatment, medical vs. surgical options, and resource-intensive therapies such as dialysis,” the study stated. “The collective outcome of these decisions can mean the difference between high-cost and low-cost healthcare.”

Dig Deeper:

How to Bend Healthcare’s Cost Curve Over the Next Decade

How to Maximize Revenue Capture with Low Costs, High Quality


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