Effect of Physician Payment Disclosure Laws on Prescribing

To limit the role of geographic variation, we analyzed charges within counties.While Fresno County had the smallest range of charges, the lowest and highest charges still differed by a remarkable $46 204.Finally, when considering the explanatory power of the covariates, we found that 67.8% of the variation in charges could be predicted by patient-level and hospitallevel factors.The remaining 32.2% of the variation was unexplained.Comment.Our first result of the median charge for treating "uncomplicated" appendicitis of $33 611 would certainly startle many patients.Given estimates that 60% of bankruptcies in the United States involve catastrophic medical expenses, 7 these data should alarm those making decisions about our society's ability to obtain medical care without financial catastrophe.A patient with severe abdominal pain is in a poor position to determine whether his or her physician is ordering the appropriate blood work, imaging, or surgical procedure.Price shopping is improbable, if not impossible, because the services are complex, urgently needed, and no definitive diagnosis has yet been made.8 In our study, even if patients did have the luxury of time and clinical knowledge to "shop around," we found that California hospitals charge patients inconsistently for what should be similar services as defined by our relatively strict definition of uncomplicated appendicitis.In order to consider health care a good that abides by traditional market theory, both consumers and producers should have a reasonable sense of how much the good costs.Yet health care providers are often unaware of what their recommendations cost.9 Consumers (ie, patients) with adequate insurance are shielded from charges, while the underinsured or uninsured see staggeringly high numbers without understanding what the charges mean, let alone if they are appropriate.Our findings suggest that there are inherent limitations of market theory within the health care system, and much work remains to be done to allow consumers to fulfill the role of a true consumer in the health care marketplace.