Price transparency for inpatient laboratory tests

Opportunity

Patients have blood drawn almost every day during a typical hospital stay. Lab tests are among the most common orders placed by physicians, but research indicates that nearly one-third of these tests are not needed. As a result, hospitals nationwide are seeking ways to use price transparency – displaying the price of lab tests at the time when physicians are placing an order – to nudge doctors to consider whether the benefits are worth the cost. However, past evidence on using price transparency has been inconsistent and limited to shorter, single-site studies.

Approach

We ran a randomized trial at three hospitals in Philadelphia with a one-year pre-intervention period and one-year intervention period. We selected 60 of the most expensive and frequently ordered inpatient laboratory tests and randomly assigned half of them to display Medicare fees in the electronic health record at the time of order entry.

Impact

We found no significant overall effect on clinician ordering behavior.  However, subset analyses revealed several important insights. First, we saw a significant decline in test ordering for patients admitted to the intensive care unit (ICU). This may be due to an “exposure effect” because clinicians are less likely to order repeating lab order sets in the ICU and are more exposed to the price information when lab tests are no longer warranted. Second, we found evidence of a “framing effect” with a small but significant decrease in the ordering of expensive tests that was offset by a small but significant increase in the ordering of less expensive tests. These findings demonstrate that price transparency efforts may need to be better targeted, framed, or combined with other approaches to be successful in changing clinician behavior.