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Daniel P. Kessler: The Hidden Cost in Changing Doctors


Daniel P. Kessler: The Hidden Cost in Changing Doctors

High fees for your own medical records can be a barrier to switching.
Health care worker reviewing a file in a massive archive
Stanford scholars found that steep fees for medical records made patients less likely to switch doctors. | Reuters/Phil McCarten

If you take your car to a mechanic and don’t like the service, there’s nothing to stop you from seeking out a different garage the next time you need a repair.

It can be different with a doctor. If you don’t like something about your doctor — she doesn’t seem to listen, isn’t solving your problem, or needs to be booked three months in advance for an appointment — you may still need her cooperation to take your business elsewhere.

Now, researchers at Stanford University’s Graduate School of Business and School of Medicine have identified a subtle obstacle to switching doctors: the cost to patients of getting their own medical records.

Though it may surprise some people, medical records are technically the property of the doctor, clinic, or hospital that creates them. The federal government’s Privacy Rule requires health care providers to give patients copies of their records “at a reasonable cost,” but the definition of “reasonable” varies widely. Although some states regulate what providers can charge for copying, others don’t; in those states, according to one survey, a voluminous patient file can cost more than $500.

You can’t make it impossible for people to switch doctors. We know that can’t be the right direction.
Daniel Kessler

High costs are obviously a financial burden to patients, but the Stanford researchers found that they had two other practical effects on health care. First, they did indeed make patients less likely to switch doctors. Second, state-imposed caps on copying fees had the beneficial side effect of encouraging health care providers to adopt electronic medical records. Adopting electronic records has a big up-front cost, but yields downstream benefits: Electronic records are faster and cheaper to transfer, and they facilitate care that is better coordinated and more effective.

The study was carried out by Daniel P. Kessler, professor at Stanford’s Graduate School of Business and Law School, and senior fellow at the Hoover Institution; Laurence C. Baker, chief of health services research at Stanford Medical School’s Department of Health Research and Policy; and M. Kate Bundorf, professor at Stanford Medical School and, by courtesy, at Stanford Graduate School of Business.

The researchers analyzed some 30 million insurance claims submitted by physicians. To identify patients who had switched doctors, the researchers looked for instances in which doctors submitted “new patient” claims for people who had been seen by other doctors in the previous three years.

The team then compared the rate of switching between states that do and do not impose strict caps on medical-record copying fees. They also controlled for other differences across states, such as the competitiveness of different health care markets.

The result: In states that imposed caps on fees for medical records, patients changed their primary doctors 11% more frequently and their specialty doctors 13% more frequently. In addition, the researchers found that health care providers were about 12% more likely to establish electronic medical records in states that imposed caps on copying fees.

At the same time, the rate of doctor-switching did not have any meaningful effect on the prices that doctors charged for visits. The price of visits correlated much more closely to the number of competing doctors in each market. That lack of any real impact on prices, the researchers say, indicates that doctors weren’t unduly burdened by either how little they could charge for medical records or by an increase in competition as a result of doctor-switching.

These effects are important. The fact that more than 1 in 10 people would switch doctors if their records were easier to get means that copying fees matter. In addition, other research suggests that adoption of electronic medical records can significantly reduce mortality in complicated cases; to the extent this is correct, caps on copying fees not only enhance patient convenience but also save lives.

Kessler says the study suggests there is a good case for regulating the fees charged for medical records: “You can’t make it impossible for people to switch doctors. We know that can’t be the right direction.”

The broader context, which the Stanford researchers have pursued in other studies, is the search for ways to improve the effectiveness of health care markets.

“We often say that markets are the right answer, but we don’t devote enough time to thinking about how those markets can work better,” Kessler said. “Markets accomplish a lot of good things, but to get their full advantage you need regulation to make sure that the participants don’t engage in anti-competitive behavior.”

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