Health Care Cost Considerations in Medical Education

By Joshua Barrett, M.D. candidate, Georgetown University School of Medicine

Medical students are routinely taught to care for the whole person. Shouldn’t that include care for the patient’s wallet as well? As more and more health care costs are being shifted to consumers, expectations about the doctor’s role in managing those costs are changing.  For many doctors, however, the recommended treatment is prescribed regardless of the cost. Something as vulgar as cost, some doctors claim, should not impede their special relationship with patients. That cost-blind rationale has pulled our healthcare system to a per capita expenditure approaching $10,000.

In the field of medicine, though, knowledge of and communication about the costs of treatments must become a vital element of healthcare delivery. Both Medicare and private insurers have increasingly incorporated financial incentives for physicians to provide value based care. For example, some insurers are experimenting with bundled payments, in which providers are allotted a certain amount of money to handle a patient’s episode of care. Others are developing accountable care organizations, or ACOs. These payment models are designed to encourage physicians and other providers to provide high quality treatment while sharing in some of the risk when there are high costs.

Patients themselves also must become more price-conscious, as they are increasingly exposed to the high cost of health care services. Since 2010, the average deductible in employer-based insurance has risen by 43 percent. With the Cadillac tax looming in 2018, employers are eyeing even greater cost-shifts to their employees. The average deductible for a Silver-level plan on the ACA’s health insurance marketplace was close to $3000 in 2015. Patients’ out-of-pocket costs for doctor visits, hospital stays and prescription drugs are also going up. As a result, more and more patients must ask what they will be required to pay, before they receive the service.

As awareness of costs becomes more important in the practice of medicine, medical schools have begun to incorporate financial considerations in student education. A survey found that 92% of responding medical schools offered a mandatory course on healthcare financing. In 40% of schools, the topic was also discussed in elective courses.

Here at the Georgetown University School of Medicine, classes on ethics and population health regularly include such discussions, especially regarding out-of-pocket costs. In a recent class, students considered how a $10,000 medical expense can affect patient health. They determined that the financial strain can manifest as psychological stress, which could then trigger mental health problems, cardiovascular disease and even obesity. More than a few of the students, with mounting education loans, could personally relate.

Clinical medicine classes at the UCLA Geffen School of Medicine now regularly include discussions on the financial implications of care. The issue of cost-effectiveness permeates lectures on differential diagnoses and treatment protocols, particularly in medical decision-making. If a CT scan can diagnose a particular condition just as effectively as a higher cost MRI, professors recommend ordering the CT. Similarly, instructors advocate for the consideration of drug prices in the decision to prescribe a comparably effective, cheaper generic version over a brand name drug.

Furthermore, students at the New York University School of Medicine are using big data to help them understand the reasons for variations in medical costs. Using a medical record database with over 5 million anonymous entries, students can examine and compare both treatments prescribed for each patient and their associated payments. Analyzing the dataset has revealed that the cost of C-sections and hip replacements contrast widely across the state of New York. Many factors including geographic location, the number of inpatient nights and the rate of preventable complications keep costs down in certain hospitals while inflating them at others.

As more insurers and employers shift costs to enrollees through higher deductibles, co-payments and co-insurance, it is a welcome change that medical school education has begun incorporating classes on health care costs. While the educational burden of medical students is certainly high, few issues are more pertinent to overall patient wellness than their financial health. Physicians who can provide high quality care at a low cost will also be rewarded professionally and financially. But it’s important to get medical students thinking about costs early in their careers. Patients’ health – and the health of their wallets – will reap the ultimate benefit.

Editor’s Note: This is the first in an occasional series of blog posts by first year Georgetown medical student, Joshua Barrett. Josh will write about the intersection of medical education with health policy and financing.

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