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Preparing residents to practice cost-effective medicine

From the November 1995 ACP Observer, copyright 1995 by the American College of Physicians.

By Edward Doyle

How are residents supposed to learn to practice cost-effective medicine?

Despite widespread agreement that housestaff need to become more cost conscious to succeed in a world dominated by managed care, many complain that they're still training in academic centers that use what has been dubbed a "credit card" approach: Order drugs and tests now and worry about paying for them later.

But there are signs that residency programs are beginning to grapple with issues of cost. Whether it's simply limiting residents' choices of drugs and tests or putting them in charge of controlling the costs of medical care, training programs are devising ways to help housestaff practice cost conscious medicine.

At Kaiser Permanente in Southern California, for example, residents (as well as physicians) must order their medicines from a closed formulary. In addition, high-cost drugs--certain cancer medications, for example--require approval for use from chiefs of the related specialty. Jimmy Hara, MD, regional medical director for graduate medical education for Southern California Kaiser, explained that instructors emphasize the role of cost in choosing drugs for the formulary. "We tell the residents that if there are two comparable drugs that have equal efficacy," he said, "we go with the one we can get for less."

Housestaff in the Canton Medical Education Foundation's residency program in Ohio work with an open formulary and have more choice about what drugs they can order, but they work with doctors of pharmacy who frequently go on rounds with them to pick the most cost-effective treatment. Robert W. Sabota, ACP Associate, a chief resident in the program, said the result is a greater awareness of cost issues. "Someone's insurance money or out-of-pocket money is going toward paying for prescriptions," he said, "so you want to be careful."

When to order tests

Drug formularies may be one relatively simple solution to controlling drug costs, but what about the more complex--and sometimes more costly--area of diagnostic tests? Albert "Cap" Hoskins, FACP, a general internist in Louisville and ACP's Governor for Kentucky, said that many of the second- and third-year residents he works with in his office tend to over order costly diagnostic tests. A resident who detects a heart murmur in a patient, for example, might want to order an electrocardiogram, an echocardiogram, chest films and a CT scan. Dr. Hoskins said that young physicians tend to need guidance when it comes to ordering tests.

Dr. Hoskins' answer to this problem de-emphasizes expensive tests and instead stresses using hands-on skills. "We're trying to get the message across to use your diagnostic skills and quit ordering every test in the book," he explained. "We say, 'let's listen to the heart murmur, let's time it, let's be conscious about other things.'" Equally important, he said, is his advice to residents who are certain that a high-priced test is needed but feel that they must first order several less expensive tests. "If you know that a person has chest pain and you know it's suspicious enough that you're ultimately going to do a cardiac cath," Dr. Hoskins said, "don't put the person through a stress valium study and echocardio-gram first."

At Mercy Hospital and Medical Centers in San Diego, where most of the attendings are in private practice and competing for contracts with HMOs, there is even more incentive to order diagnostic tests only when indicated. Explained Stanley A. Amundson, FACP, director of the internal medicine training program at Mercy, "When it comes time for those physicians to compete for managed care contracts, the plan may come back and say, 'it took you $2,000 more to treat pneumonia than the average physician and your patient acuity was the same, so we don't want you on our panel.'"

What's the solution? For one, Mercy's program conducts daily conferences where a patient case is presented and residents are asked to order tests necessary for the workup. Chief residents and attendings critique residents' choice of tests, offering better--and sometimes lower-cost--alternatives.

But the real lessons in cost consciousness come not during these conferences but in treating real patients with real problems. Whenever residents want to order any big-ticket items--a CT scan, for example--they need to clear it with the attending who will ultimately bear the economic brunt of overutilization. With smaller budget items like blood tests, the attendings are a little more relaxed. "If an attending notices that a resident is getting daily electrolyte panels on a patient," Dr. Amundson explained, "after a day or two he'll talk with housestaff. There is going to be that second day of testing that the attending probably wouldn't have ordered, and that costs a little extra, but it's not [as expensive as] the CT that costs $800, and it's not an extra day in the hospital that costs $1,000 or more."

Cutting costs or good education?

Keeping residents informed of drug or test costs is important, but is it good education? Residents aren't happy when they think their decision-making is unduly limited. "It's frustrating when you want to do something and some technocrat says you can't" was the complaint of one resident in San Francisco who was describing his program's efforts to teach cost consciousness.

Educators acknowledge that they have to do more than post the prices of drugs and tests where housestaff fill out order sheets--a common tactic among residency programs--or even worse, simply limit what residents can and can't order. "In terms of education, the best thing to do is to meet with residents and go over specific charts," explained Marshall A. Wolf, FACP, director of medical residency programs at the Brigham and Women's Medical Center in Boston. "You need to raise their awareness that it isn't necessary to do a chemistry panel every 12 hours on a stable patient."

At Mercy, for example, when attendings notice that residents want to order inappropriate tests, attendings are encouraged to take the time to educate the residents about other options and not just criticize them. And as part of the residency program in Canton, housestaff review actual patient bills. Chief resident Dr. Sabota still remembers the bill of an alcoholic patient who spent most of his last nine months of life in the hospital. The bill came to just under a half million dollars and included many expensive--and somewhat futile--procedures like CT scans and X-rays. "It makes you think twice about ordering an expensive diagnostic test, particularly something like CT or MRI," Dr. Sabota said. "You really have to sit down and ask yourself what does ordering this test gain compared to its cost and how will it guide or change your therapy?"

But young physicians need to focus on more than just cost, a lesson that educators at Case Western Reserve University in Cleveland have learned. One university course has fourth-year medical students look at the cost of treating asthmatic patients, focusing primarily on drug prices. While it's an eye-opener for medical students to learn that a child's asthma medications can easily cost more than $100 a month, some students got the wrong message. "Sometimes students think that if we just decrease the number of medications we'll be more cost-effective," explained Ilene Gilbert, MD, associate professor of medicine at Case Reserve. "They forget about other factors." A new version of the program for residents will focus not only on cutting costs of asthma care but also on improving the quality of care through the use of clinical practice guidelines.

At the Denver VA Medical Center, researchers found that by having residents function as primary care gatekeepers and monitor all tests and drugs ordered for their patients by other physicians, housestaff were able to reduce the costs of care. (Patients had to agree to participate in the study.) Instead of letting their patients be bounced among departments for difficult conditions like dizziness, the residents coordinated the care of their patients and eliminated unnecessary visits to subspecialists and duplication of services--all while getting good patient satisfaction scores on surveys sent to study participants. "We were able to eliminate some accessory clinics," explained Alan V. Prochazka, ACP Member, assistant chief of research in ambulatory care at the Denver VA. "For example, not every prostate patient has to go to urology."

Residents poised to enter the world of managed care need this type of lesson. Philip R. Boulter, MD, medical director of Tufts Health Plan and co-medical director of the Tufts Managed Care Institute, an organization recently established to educate residents and physicians, says that young physicians who don't understand cost issues in managed care--how risk relationships work, how capitation works--can run into trouble. "If they're not aware of the very sophisticated types of relationships that they can get themselves into," he said, "they can get hurt."

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