Do US Primary Care Physicians Prescribe More Tests Because of Financial Incentives? Apparently Not.

The way people discuss medical tests and referrals often acts as a kind of Rorschach Test of their health care policy positions. Entire forests have been felled by papers asserting that fee-for-service payment encourages US physicians order unnecessary tests and referrals because they get paid more when they do so. In contrast, nationalized and tightly managed health care systems are celebrated for reducing costs because physicians get paid the same no matter what they do.

 Because one man’s unnecessary test is another man’s sensible risk reduction, figuring out whether the US health care system conducts “too many” tests is harder than it looks. Comparing tests ordered by fee-for-service or managed care physician groups may miss the fact that patients self-select into different practice management styles. It is difficult to even define an unnecessary test or referral: A previous post at this blog discusses the problems inherent in defining “unnecessary” mammograms.

Having a panel pass judgment on whether a particular test is appropriate also has its problems: panels often fail to agree, and the people on the panel might not have the same attitude towards risk as a patient and his physician

In a 2006 Health Services Research paper, McKinlay et al. approached the unnecessary tests question from a novel perspective: they showed two identical video patients, one with coronary heart disease (CHD) and one with depression, to a random sample of 256 randomly selected “primary care” providers in Massachusetts and the United Kingdom. There were no national differences in test ordering.

 US physicians correctly diagnosed CHD 95 percent of the time and had a higher level of certainty that their diagnosis was correct. They were more likely to ask questions, to examine more parts of the body, and to write a disease appropriate prescription.

UK physicians correctly diagnosed CHD 88 percent of the time (not significantly different from the 95 percent diagnosis rate in the US) and were more likely to give lifestyle advice. They were more likely to refer the patient to a hospital specialist.

In managing the depression patient, US physicians again asked more questions and did more physical examinations. They were more likely to give exercise and lifestyle advice, twice as likely to write a disease appropriate prescription, and four times more likely than UK physicians to refer the patient to a mental health professional.

Though there were no differences in test ordering, McKinlay et al. perpetuated the myth that US incentives promote less than optimal care. They attributed the differences that did exist, the higher specialist referral for the CHD case in the UK and for the depression case in the US, to differences in financial incentives:

“[W]hile US internists are four times more likely to refer the depressed “patient” for specialist care (mainly to a psychiatrist or psychologist) they are three times less likely to refer the case of CHD to a cardiologist or for specialist care. This apparent inconsistency may be explained by national differences in health care financing and physician competition. Internists in the United States may view a case of depression as burdensome and costly in time and other resources (several months of repeat visits could be required.)”

Note that while US internists “may view” the case as burdensome, the authors of this paper did not actually provide any data on compensation that would support their story. Nor did they even mention the fact that US primary care physicians might feel better equipped to manage coronary heart disease than chronic depression, or consider the possibility that the different patterns of referral might result in better or worse care.

 Even though their own data did away with the myth of unnecessary tests, these authors continued to promote its twin, the blithe assertion that US health care financing arrangements promote inconsistency. US internists are said to refer depression cases but not CHD cases because depression is “burdensome.” That UK physicians refer CHD cases but not depression cases is, for some unexplained reason, just right.

Comments (5)

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  1. Bruce says:

    I’m trying to figure this out. I suppose the answer is “no.”

  2. artk says:

    “figuring out whether the US health care system conducts “too many” tests”

    It’s often said that the most expensive piece of medical equipment is a doctor’s pen. There are many doctors that don’t order more tests then necessary, but it’s clear that many order many more then is necessary. I would recommend you all reread Atul Gawande’s article about how one Texas town costs Medicare twice the national average per patient yet it’s outcomes are no better then average.

  3. Tom H. says:

    The answer — proposed more than once at this site –is to liberate the doctor and the patient from the current payment system. I don’t know if doctors order too many tests, and if they do, I don’t know if the reason is income related, fear of malpractice lawsuits or simply an attitude that reasouces are free. I do know that the current system does not encourage either doctor or patient to do a cost-benefit calculation before making decisions.

  4. John Goodman says:

    artk: check out this post:

    Gawande was wrong. McAllen, Texas does not have extraordinary medical costs. It has extraordinarily high Medicare billings. It’s easy to guess why that is. It is a poor, border city in which the only people with insurance are on Medicare or Medicaid and Medicaid rates are dirt cheap.

    So it looks like the doctors there find ways of getting Medicare to pay for a lot of the fixed costs. The MRI scanner and other expensive pieces of equipment have to get paid for somehow. McAllen providers discovered how to get we taxpayers to foot the bill.

  5. Linda Gorman says:


    Your evidence that it is clear that “many” physicians order more tests than is necessary?