Physicians' perceptions of relevant prescription drug costs

Do costs to the individual patient or to the population matter most?

William H. Shrank, George J. Joseph, Niteesh K. Choudhry, Henry N. Young, Susan L. Ettner, Peter Glassman, Steven M. Asch, Richard L Kravitz

Research output: Contribution to journalArticle

34 Citations (Scopus)

Abstract

Objectives: Physicians may be aware of at least 2 types of costs when prescribing: patient's out-of-pocket costs and the actual costs of the medication. We evaluated physicians' perceptions about relevant costs for prescription drugs and the importance of communication about these costs. Study Design: Mailed survey to a random sample of 1200 physician members of the California Medical Association, and a phone survey of a sample of nonresponders. Methods: Descriptive statistics of survey items, McNemar's test to compare survey item responses, and logistic regression to evaluate the relationship between physician, practice, and system variables and physicians' perceptions of relevant medication costs. Results: Of respondents with correct addresses, 49.6% responded to the survey; 13% of nonresponders were contacted by phone. Approximately 91% and 80% of physicians reported that it is important to manage patients' out-of-pocket costs and total medication costs, respectively. When comparing the relative importance of managing the 2 types of costs, 59% of physicians agreed that managing patients' out-of-pocket costs was more important than managing the total medication costs and only 16% disagreed. Physicians believed it was more important to discuss out-of-pocket costs than total costs with patients (P < .0001), but only 15% of physicians reported discussing out-of-pocket costs frequently and 5% reported talking about total medication costs frequently. Physicians who managed more Medicare patients had a greater likelihood than physicians managing fewer Medicare patients of prioritizing out-of-pocket cost rather than total cost management (P = .038), and generalists had a greater likelihood than medical subspecialists (P = .046). Conclusions: Physicians prioritize managing out-of-pocket costs over total medication costs. Pharmacy benefit designs that use patient out-of-pocket cost incentives to influence utilization are addressing the costs to which physicians may be most responsive. When physicians face conflicts between managing patients' out-of-pocket costs and total costs, they will likely try to protect the patients' resources at the expense of the insurer or society. Efforts to align patients', insurers', and societies' incentives will simplify prescribing decisions and result in better value in prescribing.

Original languageEnglish (US)
Pages (from-to)545-551
Number of pages7
JournalAmerican Journal of Managed Care
Volume12
Issue number9
StatePublished - Sep 2006

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Drug Costs
Prescription Drugs
medication
physician
drug
Physicians
Health Expenditures
Costs and Cost Analysis
costs
Population
Insurance Carriers
Medicare
Motivation
incentive
Surveys and Questionnaires

ASJC Scopus subject areas

  • Nursing(all)
  • Medicine(all)
  • Health(social science)
  • Health Professions(all)

Cite this

Physicians' perceptions of relevant prescription drug costs : Do costs to the individual patient or to the population matter most? / Shrank, William H.; Joseph, George J.; Choudhry, Niteesh K.; Young, Henry N.; Ettner, Susan L.; Glassman, Peter; Asch, Steven M.; Kravitz, Richard L.

In: American Journal of Managed Care, Vol. 12, No. 9, 09.2006, p. 545-551.

Research output: Contribution to journalArticle

Shrank, WH, Joseph, GJ, Choudhry, NK, Young, HN, Ettner, SL, Glassman, P, Asch, SM & Kravitz, RL 2006, 'Physicians' perceptions of relevant prescription drug costs: Do costs to the individual patient or to the population matter most?', American Journal of Managed Care, vol. 12, no. 9, pp. 545-551.
Shrank, William H. ; Joseph, George J. ; Choudhry, Niteesh K. ; Young, Henry N. ; Ettner, Susan L. ; Glassman, Peter ; Asch, Steven M. ; Kravitz, Richard L. / Physicians' perceptions of relevant prescription drug costs : Do costs to the individual patient or to the population matter most?. In: American Journal of Managed Care. 2006 ; Vol. 12, No. 9. pp. 545-551.
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abstract = "Objectives: Physicians may be aware of at least 2 types of costs when prescribing: patient's out-of-pocket costs and the actual costs of the medication. We evaluated physicians' perceptions about relevant costs for prescription drugs and the importance of communication about these costs. Study Design: Mailed survey to a random sample of 1200 physician members of the California Medical Association, and a phone survey of a sample of nonresponders. Methods: Descriptive statistics of survey items, McNemar's test to compare survey item responses, and logistic regression to evaluate the relationship between physician, practice, and system variables and physicians' perceptions of relevant medication costs. Results: Of respondents with correct addresses, 49.6{\%} responded to the survey; 13{\%} of nonresponders were contacted by phone. Approximately 91{\%} and 80{\%} of physicians reported that it is important to manage patients' out-of-pocket costs and total medication costs, respectively. When comparing the relative importance of managing the 2 types of costs, 59{\%} of physicians agreed that managing patients' out-of-pocket costs was more important than managing the total medication costs and only 16{\%} disagreed. Physicians believed it was more important to discuss out-of-pocket costs than total costs with patients (P < .0001), but only 15{\%} of physicians reported discussing out-of-pocket costs frequently and 5{\%} reported talking about total medication costs frequently. Physicians who managed more Medicare patients had a greater likelihood than physicians managing fewer Medicare patients of prioritizing out-of-pocket cost rather than total cost management (P = .038), and generalists had a greater likelihood than medical subspecialists (P = .046). Conclusions: Physicians prioritize managing out-of-pocket costs over total medication costs. Pharmacy benefit designs that use patient out-of-pocket cost incentives to influence utilization are addressing the costs to which physicians may be most responsive. When physicians face conflicts between managing patients' out-of-pocket costs and total costs, they will likely try to protect the patients' resources at the expense of the insurer or society. Efforts to align patients', insurers', and societies' incentives will simplify prescribing decisions and result in better value in prescribing.",
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