RAND study finds doctors with less experience are costlier

A new study suggests doctors with less experience are costlier than those with more experience.

The RAND Corporation study, released Monday in the November issue of Health Affairs, found that physicians with less than 10 years of experience had 13.2 percent higher overall costs than physicians with 40 or more years of experience. Those with 10 to 19 years experience had 10 percent higher overall costs than those with 40 or more years experience; those with 20 to 29 years had 6.5 percent higher overall costs; and those with 30 to 39 years had 2.5 percent higher overall costs.

The authors used a sample of 12,116 Massachusetts physicians to explore the association between physician characteristics, such as board certification, and performance and cost profiles. The authors created a cost-profiling methodology that replicated cost-profiling methods commonly used by health plans.

The authors of the study volunteered two possible explanations for why physicians with less experience are costlier than physicians with more experience.

Less experienced physicians may have practice styles that are more expensive, the authors wrote. For instance, less experienced physicians may have been trained to use newer, more expensive technology as a matter of routine while more experienced physicians are not as familiar with the newer technologies and so don’t use them as much.

The authors also theorize that the cost profiling methodologies used by health plans may be weakened by measurement inadequacy. For instance, the authors noted in the study that risk-adjustment models may fail to account for patient factors that can’t be captured by health plan claims.  

“In some sense, we’re trying to capture what might be underlying that variation in practice style – or (what’s) driving it,” said Ateev Mehrotra, MD, a RAND Corporation policy analyst and one of the study’s authors.

The results of the study were surprising, said Mehrotra, who is an associate professor of medicine at the University of Pittsburg’s School of Medicine. He expected to find higher costs associated with physicians with malpractice claims or disciplinary actions. No such association was found.

He said he also thought that larger practices, which, he noted, are being encouraged on the policy level as cost savers, would have lower costs, but no such association was found.

The study’s findings associating less experienced doctors with higher costs, Mehrotra said, are important on two fronts.

If health plans and Medicare base their policy interventions on cost profiling, there will be what Mehrotra calls “systemic winners and losers,” with the less experienced doctors more likely to be negatively impacted due to their practice patterns. Doctors that are characterized as costlier may be excluded from high-value networks or receive lower reimbursement.

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