Information Asymmetry in Hospitals: Evidence of the Lack of Cost Awareness in Clinicians

Jeremy Fabes, Tuba Saygın Avşar, Jonathan Spiro, Thomas Fernandez, Helge Eilers, ·Steve Evans, Amelia Hessheimer, Paula Lorgelly and Michael Spiro ()
Additional contact information
Jeremy Fabes: University of Plymouth
Tuba Saygın Avşar: University College London
Jonathan Spiro: University of Western Australia
Thomas Fernandez: University of Auckland
Helge Eilers: University of California
·Steve Evans: University of Plymouth
Amelia Hessheimer: Hospital Universitario La Paz
Michael Spiro: Royal Free Hospital NHS Foundation Trust

Applied Health Economics and Health Policy, 2022, vol. 20, issue 5, No 7, 693-706

Abstract: Abstract Background Information asymmetries and the agency relationship are two defining features of the healthcare system. These market failures are often used as a rationale for government intervention. Many countries have government financing and provision of healthcare in order to correct for this, while health technology agencies also exist to improve efficiency. However, informational asymmetries and the resulting principal-agent problem still persist, and one example is the lack of cost awareness amongst clinicians. This study explores the cost awareness of clinicians across different settings. Methods We targeted four clinical cohorts: medical students, Senior House Officers/Interns, Mid-grade Senior Registrar/Residents, and Consultant/Attending Physicians, in six hospitals in the United Kingdom, the United States, Australia, New Zealand and Spain. The survey asked respondents to report the cost (as they recalled) of different types of scans, visits, medications and tests. Our analysis focused on the differential between the perceived/recalled cost and the actual cost. We explored variation across speciality, country and other potential confounders. Cost-awareness levels were estimated based on the cost estimates within 25% of the actual cost. Results We received 705 complete responses from six sites across five countries. Our analysis found that respondents often overestimated the cost of common tests while underestimating high-cost tests. The mean cost-awareness levels varied between 4 and 23% for different items. Respondents acknowledged that they did not feel they had received adequate training in cost awareness. Discussion The current financial climate means that cost awareness and the appropriate use of scarce healthcare resources is more paramount than perhaps ever before. Much of the focus of health economics research is on high-cost innovative technologies, yet there is considerable waste in the system with respect to overtreatment and overdiagnosis. Common reasons put forward for this include defensive medicine, poor education, clinical uncertainty and the institution of protocols. Conclusion Given the role of clinicians in the healthcare system, as agents both for patients and for providers, more needs to be done to remove informational asymmetries and improve clinician cost awareness.

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s40258-022-00736-x Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:aphecp:v:20:y:2022:i:5:d:10.1007_s40258-022-00736-x

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/40258

DOI: 10.1007/s40258-022-00736-x

Access Statistics for this article

Applied Health Economics and Health Policy is currently edited by Timothy Wrightson

More articles in Applied Health Economics and Health Policy from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().