How Doctors Are Experimenting With Cutting Health-Care Costs

Small innovations are adding up to signal that providers and insurers are interested in saving money for patients.

Being pregnant on Obamacare has given me a close-up look at the potholes of America’s health-care system: high deductibles, redundant or unnecessary procedures that get charged against those high deductibles, and the lack of listed prices for procedures (which makes shopping for the best deal difficult), to name a few.

But my pregnancy has also made me fascinated with the details of how providers, patients, and insurance companies navigate this terrain. Better still, it has exposed me to inventive ideas that are being experimented with in different parts of the country.

The Pennsylvania-based Geisinger Health System, for example, is trying out one particularly novel innovation: an app that will allow unhappy customers to request a refund. As Geisinger’s CEO, David Feinberg, explained his thinking to a conference of his peers this fall, “We’re going to do everything right. That’s our job, that’s our promise to you. And you’re the judge. If you don’t think so, we’re going to apologize, we’re going to try to fix it for the next guy, and as a small token of appreciation we’re going to give you some money back.” After all, he pointed out, if a customer doesn’t like his latte at Starbucks, he can get a refund. Why shouldn’t a patient have the same option?

The app, called ProvenExperience, has only just launched, and it will be interesting to see whether it gives patients more agency and, in so doing, perhaps obviate the need for some lawsuits. Will other providers feel pressure to connect costs to results, and give patients a way to express feedback, in a similarly concrete way?

Meanwhile, some people, such as Neel Shah, are dealing more directly with the costs of services, as opposed to just their value. Shah, 33, is an assistant professor at Harvard Medical School, an OB/GYN, and the founder of a nonprofit that collects first-person accounts from patients and doctors about health-care costs. His goal, as well as the nonprofit’s, is to save patients money without adversely affecting their health outcomes.

Patients, providers, and insurers alike have a role to play. That includes doctors, he acknowledges: According to his nonprofit, Costs of Care, clinicians’ decisions dictate how about 90 percent of health-care dollars are spent.

I spoke to Shah one evening after he got off work, and he told me that there’d been a lot of births that day. I asked him how many C-sections he performed. “I did a lot, to be honest,” he said. “I like to think they were necessary.”

If he sounded a bit rueful, it was because C-sections are one of the most enduring, expensive mysteries of modern health care. They command about a 50 percent margin over a vaginal delivery and can cost a patient about $10,000 more, though the exact amount varies state by state. Because C-sections are surgeries, they can result in much more serious complications. Yet, Shah told me, they have gone up in frequency about 500 percent in the past several decades, and no one can accurately, satisfactorily explain why. (In 1970, one in 20 American babies was born via Caesarian; nowadays the rate is one in three.) “Generally speaking,” said Shah, “about half could be avoided in retrospect—‘in retrospect’ being the key words there.”

The fact that Shah is not afraid to implicate himself, let alone his sub-specialty, in his discussions of what should change may be part of the reason he has succeeded in making some headway on the issues he cares about.  A new Costs of Care textbook titled Understanding Value-Based Healthcare, for example, helps students conceive of medical care in terms of what works and what’s wasteful. And the organization has been able to partner with much larger and more well-established players such as the American Board of Internal Medicine Foundation to brainstorm, and eventually implement, real changes in how medicine is practiced in the U.S., with the goal of bringing costs down.

When Shah was in medical school in the late aughts, he noticed that no one was discussing the financial aspect of practicing medicine. As a third-year, he said, “everyone above you, even the 4th years, seems omniscient, but the one thing no one had any insight into was how our decisions were impacting what anybody paid.”

This bothered him so much that he took a short detour to get another graduate degree, from the Kennedy School, where he studied under professors who were helping to write the legislation that would become the Affordable Care Act. At Harvard, professors spoke about cost, but only on the scale of big-picture economic indicators. “Nobody goes to med school to treat the GDP,” Shah pointed out. “Even the best economists, I could tell them things they didn’t know, just from being a third-year med student.”

Shah is optimistic about how doctors can take a proactive role in reducing health-care costs. “There’s much more top-down pressure on clinicians to be accountable. There’s more measurement, and there’s much more tech that enables measurement,” he says. People receiving care are different now, as well, thanks to the Internet: They’re more engaged, more discerning. “Patients are used to transparency in price in a way that wasn’t true in the early 90s,” Shah says. That makes them well-positioned to participate in bringing costs down, too.

Overall, I have been encouraged by other innovations I’ve encountered, such as the laminated cards distributed to doctors to remind them of cost-saving strategies when prescribing medications to patients (pioneered by Chicago’s Dr. Vinny Arora), and the website Clear Health Costs, which enables prospective patients to compare the prices of procedures performed in different locations within the same area. (It turns out the same MRI can range from $400 to $1200, depending on where in a city it is administered.) In many ways, these are small shifts in the health-care landscape. But they also represent a general, even generational, shift, one signaling that practitioners and insurers alike are beginning to take seriously their responsibility to first do no harm—to patients’ bodies or to their bank accounts.