Does Price Transparency Improve Lab Utilization?

Physicians often have poor awareness of costs. For that reason, many believe that providing cost information to physicians would increase awareness that, in turn, could improve laboratory utilization. For example, costs of lab tests could be displayed as a field in the computerized provider order entry system. Interventions of this type are attractive because they are relatively inexpensive to implement and do not disrupt workflow with popups. Further, unlike other interventions, cost display is sustainable. Some interventions require constant training and followup whereas cost display is a one-time intervention. For these reasons, organizations are experimenting to see the effect of cost display on laboratory utilization.

Does cost display reduce lab utilization? Studies have shown wide variation in impact. Most studies have focused on orders for laboratory testing and imaging; however, a few studies have looked a pharmaceuticals.  A recent systematic review concluded that cost display is associated with a modest reduction in laboratory utilization.(1) The review included twelve studies on lab utilization and all of these showed improvement.(2-13) However, a more recent study by Sedrak et al. found that cost-display had no impact on utilization.(14) Similarly, two imaging studies found that cost-display had no effect on orders.(4, 15). There was a wide variation in impact: test utilization reduction ranged from 0% to over 30% in some cases. Overall, it appears that cost display tends to reduce utilization; however, it sometimes has no effect as shown in the Sedrak study. So far, cost display has never been associated with an increase in utilization. We have experimented with cost display at University of Utah and, like the Sedrak study, found no effect.

Why is there such a range of effects? Can we predict which organizations are likely to benefit? The short answer is that nobody knows.  The twelve studies on lab utilization where conducted in a wide range of settings (community, academic and pediatric hospitals), included different numbers of tests, or had other differences that could affect results. The way in which costs are displayed also varies. Some sites use the Medicare Maximum Allowable Reimbursement Rate, some use a series of dollar signs to indicate cost categories, and others use charges. It is not clear whether these differences matter.

There are a number of factors that might affect the impact of cost display. For example, cost display might have less impact at an institution that has an effective utilization management program in place because there is less opportunity for improvement. Or, the number of tests with costs displayed may have an impact. For example, some studies have displayed costs for a relatively few number of tests whereas other studies showed costs for a large number of tests.  Cost display for a few tests may send a different signal to providers than providing costs for all tests. Also, we don’t know how long the intervention works. Is there an initial effect that wears off? If so, how long does it last? These questions will need to be resolved by future studies.

In the meantime, should you provide cost feedback at your institution? It is hard to predict what will happen but most evidence suggests that you will see some improvement in utilization. It is not expensive to implement and some organizations have seen a significant impact. At worst, the evidence suggests that you will see no effect on testing behavior.  On balance, cost-display seems like a low-risk intervention.



  1. Silvestri MT, Bongiovanni TR, Glover JG, Gross CP. Impact of price display on provider ordering: A systematic review. Journal of Hospital Medicine 2016;11:65-76.
  1. Fang DZ, Sran G, Gessner D, et al. Cost and turn-around time display decreases inpatient ordering of reference laboratory tests: A time series. BMJ Quality and Safety 2014;23:994-1000.
  1. Nougon G, Muschart X, Gérard V, et al. Does offering pricing information to resident physicians in the emergency department potentially reduce laboratory and radiology costs? European Journal of Emergency Medicine 2015;22:247-52.
  1. Durand DJ, Feldman LS, Lewin JS, Brotman DJ. Provider cost transparency alone has no impact on inpatient imaging utilization. Journal of the American College of Radiology 2013;10:108-13.
  1. Feldman LS, Shihab HM, Thiemann D, et al. Impact of providing fee data on laboratory test ordering: A controlled clinical trial. JAMA Internal Medicine 2013;173:903-8.
  1. Horn DM, Koplan KE, Senese MD, Orav EJ, Sequist TD. The impact of cost displays on primary care physician laboratory test ordering. J Gen Intern Med 2014;29:708-14.
  1. Ellemdin S, Rheeder P, Soma P. Providing clinicians with information on laboratory test costs leads to reduction in hospital expenditure. South African Medical Journal 2011;101:746-8.
  1. Schilling UM. Cutting costs: The impact of price lists on the cost development at the emergency department. European Journal of Emergency Medicine 2010;17:337-9.
  1. Seguin P, Bleichner J, Grolier J, Guillou Y, Mallédant Y. Effects of price information on test ordering in an intensive care unit. Intensive Care Medicine 2002;28:332-5.
  1. Hampers LC, Cha S, Gutglass DJ, Krug SE, Binns HJ. The effect of price information on test-ordering behavior and patient outcomes in a pediatric emergency department. Pediatrics 1999;103:877-82.
  1. Bates DW, Kuperman GJ, Jha A, et al. Does the computerized display of charges affect inpatient ancillary test utilization? Arch Intern Med 1997;157:2501-8.
  1. Tierney WM, Miller ME, McDonald CJ. The effect on test ordering of informing physicians of the charges for outpatient diagnostic tests. N Engl J Med 1990;322:1499-504.
  1. Everett GD, Deblois CS, Chang PF. Effect of Cost Education, Cost Audits, and Faculty Chart Review on the Use of Laboratory Services. Arch Intern Med 1983;143:942-4.
  1. Sedrak MS, Myers JS, Small DS, et al. Effect of a Price Transparency Intervention in the Electronic Health Record on Clinician Ordering of Inpatient Laboratory Tests: The PRICE Randomized Clinical Trial. JAMA Internal Medicine 2017.
  1. Chien AT, Ganeshan S, Schuster MA, et al. The effect of price information on the ordering of images and procedures. Pediatrics 2017;139.



-Robert Schmidt, MD, PhD, MBA, MS is a clinical pathologist who specializes in the economic evaluation of medical tests. He is currently an Associate Professor at the University of Utah where he is Medical Director of the clinical laboratory at the Huntsman Cancer Institute and Director of the Center for Effective Medical Testing at ARUP Laboratories.

What is the Patient’s Right With Respect to Laboratory Testing Orders?

I was recently in Arizona for a meeting and being there made me think of an email that I had received the day before I flew out. Apparently, the Arizona House of Representatives recently passed legislation (HB 2645) allowing direct lab test ordering by patients without a physician’s request or written authorization. This bill would still need to be signed into law to go into effect but I was still surprised to read about this bill.

Interested parties worked together to have the original bill amended with the stipulation that the laboratory would have the authority to decide which tests (or none) that patients may order. In some states, such a law I believe already exists (but don’t quote me on that…I tried finding confirming this but was not successful). But this begs the question, who takes responsibility for the test results? Currently, the Arizona bill states that test results would go to the person who provided the sample if a physician did not order the test. It would be their responsibility to consult with a physician for test result interpretation and required care and no physician would be liable for not acting on the test results if s/he did not order them.

So what is your opinion on patients self-ordering lab tests for themselves? Would this lead to patients second guessing their physicians if they want a lab test based on information that they personally gathered but that their physician disagrees with? Or would this make it easier for both the patient and physician in cases of routine testing? Are there implications that we have not thought of?

As an AP/CP resident, I’m not quite sure where I fall on this issue. Sure, having been “raised” in a training environment where vestiges of a previously patriarchal ethos and bias remain, it is difficult to imagine patients, and not physicians, choosing what tests to order. After all, hopefully, four years of medical school and multiple years of residency and eventual fellowship, should help inform these decisions more than internet searches and anecdotal stories can. But I have always been a patient advocate first. And I am always willing to take a step back to think about questions from the patient’s point of view and try to set aside my own biases, if doing so will improve patient care and safety.

But as with every human being, I’m cognizant that I do have biases. And as a resident who has had to navigate what we know as CP call, I understand that physicians, too, often have difficulty knowing what tests to order and what they should be looking for in a “good test” to provide them with the appropriate answers that they and their patients seek. I’m sure we’ve all dealt getting pages where we had to shut down what I like to refer to as “shotgun” ordering – multiple tests that are ordered hoping to find an answer in those cases where there is no differential or a very exhaustive one. Especially since without a targeted differential, test results may be difficult to interpret. Additionally, I’ve often seen other issues such as duplicate orders when a panel along with specific additional tests that are (unknowingly) included in the panel are ordered or the wrong test(s) ordered altogether. So it does pay to have another set of informed eyes look over test orders.

As a pathology resident, and even one with extensive lab and research experience prior to medical school, I can admit that I learn more and more each time I’m on a CP rotation about how to gauge the analytic and clinical validity of specific lab tests. Just because a test exists, doesn’t always mean that we should use it or always order it for every patient. This is the role I feel that we fill for referring physicians and patients. We develop and make sure tests are conducted properly, safely, and efficaciously. We also serve as a resource with knowledge on which tests, specimen sources and other analytic parameters, and patient populations are appropriate. We can also identify and troubleshoot when false positives or negatives are suspected as well as provide an interpretation of the test results within the context of clinical patient history that we can access through the EMR. But that is within the confines of the walls of the medical culture and environment, which I admit is not perfect and has areas that we can still work on to improve.

But when it comes to patients ordering tests outside the purview of direct medical care, I’m not sure what my stance is. In this country, patient autonomy is king. As physicians, we don’t always have to agree with our patient’s decisions, but we do need to respect them. We cannot arbitrarily subjugate patients to the dictatorship of a patriarchal perspective (at least not in this modern day), even within a patient care setting. So, at least in my mind, a grey zone exists in the context of a patient who is willing to pay or who can get his/her insurance to pay (although that is entirely another issue) for a specific test not ordered by their physician. But I do worry that this could set up complications for evidence-based patient care. There are multiple levels of implications that I’m sure we have not even thought of – not only for the physician who has to decide what to do when their patient brings in results from a test that they personally ordered without physician authorization but also for the patient to not feel as if they are falling through the cracks of our healthcare system if physicians decide to not act on these test results. I can imagine that there are medicolegal issues that are significant as well but I humbly admit that these are definitely beyond my expertise to comment on at this time. However, I do know that I believe that patients have a right to access their test results directly and not have to go through their provider if they choose not to.

I wrote this post not to necessarily push readers to one viewpoint or another but more so to provoke thought. So, how do you think this bill will affect healthcare in Arizona or set a precedent for other states to follow and what is your stance? I can honestly say, I’m still thinking it over…

This post is an edited version of one that appeared on 2/27/15.



-Betty Chung, DO, MPH, MA is a third year resident physician at Rutgers – Robert Wood Johnson University Hospital in New Brunswick, NJ.