News Release

PHILADELPHIA – Patients are stuck for a blood draw almost every day they are admitted to a hospital.  Lab tests are one of the most common orders placed by doctors, but research indicates that nearly one-third of these tests are not needed. Hospitals nationwide are seeking ways to use price transparency – displaying the price of lab tests at the time when doctors are placing the order – to nudge doctors to consider whether the benefits are worth the cost. But, results of a new study, show that simply displaying the Medicare allowable fees did not have an overall impact on how clinicians ordered these tests. The results, from the Perelman School of Medicine at the University of Pennsylvania, are published today in JAMA Internal Medicine and presented at the Society of General Internal Medicine annual meeting in Washington, DC.

“Price transparency is increasingly being considered by hospitals and other health care organizations as a way to nudge doctors and patients toward higher-value care, but the best way to design these types of interventions has not been well-tested,” said senior author Mitesh S. Patel, MD, MBA, MS, an assistant professor of Medicine and Health Care Management in Penn’s Perelman School of Medicine and the Wharton School, and director of the Penn Medicine Nudge Unit. “Our findings indicate that price transparency alone was not enough to change clinician behavior and that future price transparency interventions may need to be better targeted, framed, or combined with other approaches to be more successful.”

In the new study – the largest of its kind – researchers randomly assigned 60 groups of inpatient laboratory tests to either display Medicare allowable fees in the patient’s electronic health record (intervention arm), or not (control arm). The randomized clinical trial was conducted at three hospitals within the University of Pennsylvania Health System over a one-year period and compared changes in the number of tests ordered per patient per day, and associated fees, for more than 98,000 patients (totaling over 142,000 admissions).

Results of the study showed that in the year prior to the study, when cost information was not displayed, the average number of tests and associated fees ordered per patient per day was 2.31 tests totaling $27.77 in the control group, and 3.93 tests totaling $37.84 in the intervention group. After the intervention, when cost information was displayed for the intervention group, researchers noted the average number of tests and associated fees ordered per patient per day did not change significantly and was 2.34 tests totaling $27.59 in the control group, and 4.01 tests totaling $38.85 in the intervention group.

Though the study found no overall effect, the authors noted important findings in specific patient groups that have implications for how to improve price transparency in the future. For example, there was a slight decrease test ordering for patients admitted to the Intensive Care Unit – an environment in which doctors are making rapid decisions and may be more exposed to the price transparency intervention. The authors also found that the most expensive tests were ordered less and the cheaper tests were ordered more, suggesting that future interventions might be more successful if they are better designed to framed relative pricing.

“Electronic health records are constantly being changed, from how choices are offered to the way information is framed,” said C. William Hanson, MD, chief medical information officer for the University of Pennsylvania Health System, and a member of the steering committee for the Penn Medicine Nudge Unit. “By systematically testing these approaches through real-world experiments, health systems can leverage this new evidence to continue to improve the way care is delivered for our patients.”

“Price transparency continues to be an important initiative, but the results of this clinical trial indicate that these approaches need to be better designed to effectively change behavior” said Patel, who is also a staff physician at the Crescenz VA Medical Center, and whose work is supported by the Penn Center for Health Incentives and Behavioral Economics. 

Other Penn authors  on the study include Jennifer S. Myers, Dylan S. Small, Irving Nachamkin, Dana Murray, Gregory Kurtzman, Jingsan Zhu, Wenli Wang, Deborah Mincarelli, Daniel Danoski, Brian P. Wells, Jeffrey S. Berns, Patrick J. Brennan, C. William Hanson, and C. Jessica Dine. Lead author Mina Sedrak conducted the study during a fellowship in Hematology-Oncology at Penn and is currently at the City of Hope. 

Penn Medicine is one of the world's leading academic medical centers, dedicated to the related missions of medical education, biomedical research, and excellence in patient care. Penn Medicine consists of the Raymond and Ruth Perelman School of Medicine at the University of Pennsylvania (founded in 1765 as the nation's first medical school) and the University of Pennsylvania Health System, which together form a $6.7 billion enterprise.

The Perelman School of Medicine has been ranked among the top five medical schools in the United States for the past 20 years, according to U.S. News & World Report's survey of research-oriented medical schools. The School is consistently among the nation's top recipients of funding from the National Institutes of Health, with $392 million awarded in the 2016 fiscal year.

The University of Pennsylvania Health System's patient care facilities include: The Hospital of the University of Pennsylvania and Penn Presbyterian Medical Center -- which are recognized as one of the nation's top "Honor Roll" hospitals by U.S. News & World Report -- Chester County Hospital; Lancaster General Health; Penn Wissahickon Hospice; and Pennsylvania Hospital -- the nation's first hospital, founded in 1751. Additional affiliated inpatient care facilities and services throughout the Philadelphia region include Good Shepherd Penn Partners, a partnership between Good Shepherd Rehabilitation Network and Penn Medicine.

Penn Medicine is committed to improving lives and health through a variety of community-based programs and activities. In fiscal year 2016, Penn Medicine provided $393 million to benefit our community.