As more physicians move from solo and small practices, a dozen common medical procedures are becoming more expensive in areas where physicians are clustered into large medical practices, according to a new study.

The October study in Health Affairs assessed the relationships between physician competition and prices paid by private organizations in 2010 for 15 common, high-cost procedures to determine whether high concentrations of physician practices and accompanying increased market power were associated with higher prices for services.

They found that prices were indeed 8 to 26 percent higher in the thousands of counties analyzed, with the highest average physician concentration compared to counties with the lowest. This was for 12 of the 15 procedures they examined, including colonoscopy with lesion removal, vasectomy, laparoscopic appendectomy and knee replacement surgery.

“Our findings are consistent with the hypothesis that greater market power allows physicians to bargain for higher prices from insurers,” wrote Dan Austin, a graduate of the Stanford University School of Medicine and a resident physician at the University of California, San Francisco, and Laurence C. Baker, chair of Health Research and Policy at Stanford and a core faculty member at CHP/PCOR.

“We concluded that physician competition is frequently associated with prices,” they said. “Policies that would influence physician practice organization should take this into consideration.”

The authors studied 15 high-cost, high-volume procedures that generated 7,000 total bills in 2010 and had a mean price of at least $500. They identified nine surgical and medical specialties: dermatology, cardiology, radiation oncology, gastroenterology, otolaryngology, urology, ophthalmology, orthopedics, and general surgery.

Average prices for the procedures studied varied. Total knee replacement surgery and insertion of intracoronary stent were the two most expensive, at  $2,301 and $1,282, respectively. Vasectomy and colonoscopy were the least expensive, at  $576 and $586.

The authors found there was also considerable variation across counties within each specialty. The mean price in the 90th-percentile county was 1.8 to 2.7 times higher than in the 10th-percentile county. The 75th-percentile county was commonly $200 to $300 more expensive than the 25th-percentile county, and in some cases more.

This study adds to the growing body of research that demonstrates wide variation in medical prices for the same procedure or test based on a number of factors, including where a procedure is performed and who performs it.

“We know from some good examples that larger, well-run practices can provide high- quality care," Baker said in an interview. “And many of our current policies are built around the notion that we should encourage the formation of larger organizations in the hope of improving the quality of care and fostering improvements in value."

But, adds Baker: “It is also important that we factor in these kinds of effects on prices and the downstream impacts this can have on our health-care costs.”

Health economics expert Laurence C. Baker has been appointed chair of the Department of Health Research and Policy (HRP) in the Stanford School of Medicine. He said he intends to encourage students and faculty within the department to expand the use of emerging data and analytic tools in their health-care research and policy recommendations.

Baker, a professor of health research and policy and a core faculty member at the Center for Health Policy/Center for Primary Care and Outcomes Research, succeeds Philip W. Lavori, who becomes vice chair of the newly established Department of Biomedical Data Science.

“Laurence is a natural and excellent choice for the HRP chair position,” said Stanford Dean of Medicine Lloyd Minor. “Well-respected, trusted, and admired by his peers, Laurence has been chief of Health Services Research within HRP since 2001, during which time the division has grown in strength and reputation.”

Minor called Baker one of the top health economic experts in the world with a strong policy focus, saying he would “bring the unique perspective, energy, and thoughtful guidance needed during this time of change for the department.”

The Health Research and Policy department houses the divisions of Health Services Research and Epidemiology, and provides the analytical foundation for research conducted at the Stanford School of Medicine, offering expertise, research and training on collecting and interpreting the scientific evidence essential to improving human health.

“It’s an exciting time for health policy and the Division of Health Services Research,” Baker said. “The country is facing important challenges in our health-care system, and countries around the globe are looking for insights and new ideas that can improve health care. So  there are real opportunities for Stanford to be a leader and make a difference.”

Baker, who is also a research associate at the National Bureau of Economic Research, said that in his new role he intends to strengthen the epidemiology and the health services research groups at HRP. He will build on Lavori’s efforts to recruit diverse junior and senior faculty, train and retain graduate students and post-MD physician scientists, and make significant contributions to the Stanford Cancer Institute and Population Health Sciences.

“I’ve learned a lot from Phil and have really appreciated his steady and thoughtful leadership of HRP, as well as his insightful approaches to seeking excellence at a time of great change,"  Baker said. “We already have a strong history of making important contributions, and I think we are in an excellent position to make the most of new opportunities — like bigger and better emerging data and analytic tools and new settings for research — to do outstanding work.”

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Baker said that the department successes have also included growing its faculty, establishing  new PhD programs and working on interdisciplinary research projects at the School of Medicine and in collaborations with CHP/PCOR.

“I want to continue looking for opportunities to grow and strengthen the research and education that we offer, in the hope that we can strengthen the overall contribution to national and international health policy that Stanford can make,” he said.

Baker’s research examines the impact of financial incentives, regulations and organizational structures in health care. He also looks at the impact of managed care and related insurance arrangements on health care costs, the pricing of physician services, prices for health insurance and the availability and utilization of medical technologies.

Baker completed his doctoral degree in Economics at Princeton in 1994, and joined the faculty at Stanford in HRP soon after. His research focuses on the way that changes in health-care delivery systems influence the cost and quality of care, with a particular interest in the growth of large, multi-specialty, and hospital-affiliated medical practices.

In addition to his position in HRP, Baker is a professor of economics (by courtesy) at Stanford, a fellow of the Center for Health Policy, and a senior fellow of the Stanford Institute for Economic Policy Research.

He also leads the School of Medicine’s Scholarly Concentration and Medical Scholars programs. Baker has received multiple honors and awards, including the ASHE medal from the American Society of Health Economists, and has helped lead key professional groups, serving on the boards of directors of the International Health Economics Association, AcademyHealth, and the American Society of Health Economists.

“There is growing recognition of the need for well-crafted health policies that can help us deliver quality care and real value,” Baker said. “More and more people are on the lookout for ways to improve population health in the United States and around the world, so I think we’re going to see more interest in the kind of work we do.”

Most Americans will get at least one faulty diagnosis in their lifetime, sometimes with devastating consequences. “Urgent change is warranted to address this challenge,” according to a recent landmark report from the Institute of Medicine.

The September report, by a committee of medical experts, found that despite dramatic improvements in patient safety over the last 15 years, diagnostic errors have been the critical blind spot of health-care providers.

Kathryn McDonald, executive director of Stanford’s Center for Health Policy/Center for Primary Care and Outcomes Research, is a member of the committee that wrote the report, “Improving Diagnosis in Health Care.”

We ask McDonald Five Questions about the report’s findings and also got her suggestions for limiting one of the most overlooked health-care dilemmas today. You can read her responses here on the Stanford Medicine news center website.

Read more here about the report when it came out last month.

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Basic science aims to advance knowledge, not only develop new drugs or cure disease. Yet today's biomedical innovations are only possible because of fundamental research conducted decades ago. As national funding priorities shift toward applied research, young basic scientists face the most challenging funding landscape in 50 years, diverting many of them to new careers altogether. Though impossible to divine where the experiments of Stanford investigators and researchers will lead them, investing in their work — and in basic science in general — is crucial to keeping the next great discovery alive.

In this multimedia photo essay, Magnum photographer Peter van Agtmael and FSI digital media associate Kylie Gordon, shine light on the interdisciplinary medical and scientific research being conducted at Stanford — which could lead to the #NextGreatDiscovery.

Most Americans will get at least one faulty diagnosis in their lifetime, sometimes with devastating consequences and “urgent change is warranted to address this challenge,” a panel of medical experts said Tuesday.

In a landmark report by the Institute of Medicine, the medical arm of the National Academies of Sciences, Engineering and Medicine, the experts said that despite dramatic improvements in patient safety over the last 15 years, diagnostic errors have been the critical blind spot of health-care providers.

Exact figures on diagnostic errors are hard to come by, as reporting is not required. Some medical experts have estimated that more than 12 million adults are misdiagnosed every year.

“Despite the pervasiveness of diagnostic error and the risk for patient harm, they have been largely unappreciated within the quality-safety movement in healthcare — and this cannot and must not continue,” said Dr. Victor Dzau, president of the Institute of Medicine, an independent organization of the country’s leading medical and health policy researchers.

“Diagnostic errors are a significant contributor to patient harm and have received too little attention until now,” he said at a public briefing in Washington, D.C., about the report, “Improving Diagnosis in Health Care.”

To address the challenge, the IOM convened the committee comprised of medical and health policy researchers to improve diagnosis in medicine. The Committee on Diagnostic Error in Health Care members include experts from Stanford, Harvard, Drexel, Tufts, the Memorial-Sloan Kettering Cancer Center, Kaiser Permanente and more than a dozen other universities and national medical organizations.

“We defined diagnostic error from a patient's perspective, and brought together the research so far that clearly shows the opportunity and grave need to improve the current situation,” said Kathryn M. McDonald executive director of Stanford’s Center for Health Policy/Center for Primary Care and Outcomes Research, and a member of the IOM committee.

“The report is packed with reasons and directions for action from all, in ways that support what patients deserve from the health-care system: freedom from worry about inattention to diagnostic errors,” McDonald said. “That's been the status quo for too long.”

The committee issued a set of goals to reduce diagnostic errors and improve medical outcomes. They recommend that the health-care community:

1. Facilitate more effective teamwork in the diagnostic process among health-care professionals, patients and their families.

2. Enhance health-care professional education and training in the diagnostic process.

3. Ensure that health information technologies support patients and health-care professionals in the diagnostic process.

4. Develop and deploy approaches to identify, learn from and reduce diagnostic errors and near misses in clinical practice.

5. Establish a work system and culture that supports the diagnostic process and improvements in diagnostic performances.

6. Develop a reporting environment and medical liability system that facilitates improved diagnosis through learning from diagnostic errors and near misses.

7. Design a payment and care delivery environment that supports the diagnostic process.

8. And provide dedicated funding for research on the diagnostic process and diagnostic errors.

The experts emphasized that medical education must include more of an emphasis on the diagnostic process. And new technologies, such as electronic health records, should be built on better collaboration among the IT vendors, users and the Office of the National Coordinator for Health Information Technology.

The new study was an extension of two benchmark reports by the institute released 15 years ago, which revealed the startling statistic that 100,000 Americans die in hospitals every year due to medical errors.

“These landmark reports from IOM reverberated throughout the healthcare community and were the impetus for system-wide improvement in patient safety and quality,” Dzau said.

The Department of Health and Human Services reported in December that there was a decline from 2010 to 2013 in hospital-acquired infections, which translated to 1.3 million patients and $12 billion in health spending avoided.

“You can see we have come a long way,” Dzau said. But, he added: “The critical element that has been absent from patient safety and quality is diagnostic error.”

In a video released at the public briefing, two patients talk about their own misdiagnosis and that of a loved one, and how those errors forever changed their lives. They were told they were overreacting and not to question their doctor. One said she was embarrassed at having wasted the valuable time of the hospital doctors and nurses.

“The video has two patients for whom things went poorly and one who had a first-class diagnostic experience because of excellent teamwork,” McDonald said. “And this is one of the key messages of the report. We need less of the old model of diagnosis from one expert to more of a teamwork approach to the diagnostic process.”

Dr. John Ball, chair of the committee and executive vice president emeritus of the American College of Physicians, said clinicians must work toward a culture where patients are central to the solution.

“Patients and families are first; diagnostics are second and those who support it, third,” said Ball. “This is an issue that matters to patients, and we’re shining a light on it.”

Ball said getting the right diagnosis is critical because it impacts every other health care decision that follows, as well as the quality of life for the patient.

The committee members were asked during the briefing why they were not recommending that misdiagnosis reporting be mandatory, something that likely will lead to controversy.

“The committee believes that given the lack of agreement on what constitutes a diagnostic error, given the complexity of hard data and the lack of valid measurement approaches, the time was not right to call for mandatory reporting,” Ball said. “Instead it was appropriate at this time to leverage the intrinsic motivation of health-care professionals to improve the diagnostic performance and to treat diagnostic error in the same way we treat other quality improvement efforts by health-care organizations.”

The three women who are the first doctoral candidates in the School of Medicine’s new PhD in Health Policy program have one guiding belief:  economics, decision science and data are now key to improving health care.

Stanford Health Policy, through the Department of Health Research and Policy at the School of Medicine, launched the PhD program to educate the next generation of scholarly leaders in the field of health policy.

And the first crop of candidates is taking their backgrounds in science and economics to pursue health policy careers based on medical information technology, data and analytics.

“We live in an era where information in health care is more rapidly and readily available than ever before,” said Catherine Lei, who will focus on the industrial organization of health care, the effects of insurance costs and the impact of regulation on health insurance markets.

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“Whether it be the digitization of medical records, the aggregation of pharmaceutical companies’ research into electronic databases, or the increased transparency of the health-care sector as a whole — stakeholders from every corner of the industry recognize that this is a critical turning point in health care,” said Lei.

Kyu Eun Lee, who worked as a research assistant at the Harvard Center for Health Decision Science before joining Stanford, intends to develop mathematical models for health interventions in Asia and other parts of the developing world.

“I am seeking advanced training in quantitative methodology and the application of those skills to support decision-making in a global health context,” said Lee, who graduated from Pohang University of Science and Technology in South Korea and then got her master’s of science at the University of Minnesota.

“I am particularly interested in model-based, cost-effectiveness analysis of cancer interventions in South or Southeast Asia, where the risks of communicable and noncommunicable diseases compete under limited resources,” she said.

The new program offers coursework in two tracks: Health Economics, including the economic behavior of individuals, providers, insurers and governments and how their actions affect health and medical care; and Decision Sciences, which uses quantitative techniques to assess the effectiveness and value of medical treatments.

“The new PhD program really developed because of our aim to offer premier educational programs that will train the next generation of health policy leaders,” said Laurence Baker, professor of Health Research and Policy and chief of Health Services Research in the department of Health Research and Policy.

“One of the real strengths of the program is its context at Stanford, with a rich set of opportunities for health policy students to interact with the clinicians and scientists from around the school of medicine and the university,” said Baker, who is also an affiliated faculty member at the Center for Health Policy/Center for Primary Care and Outcomes Research (CHP/PCOR).

Yiqun Chen, who will focus on the supply and demand of health care both in the United States and China, said her double major in economics and medicine at Peking University made her aware of the integral role that economics plays in providing an analytic framework for studying the meaty issues in health care today.Chen, who went on to get her master’s in economics at Duke University, has published several papers and intends to investigate whether Medicaid payment increases to nursing homes result in cost offsets.

“The utilization of hospital services is high among nursing home residents; yet a large proportion of stays are documented to be avoidable through provision of better quality of nursing home care,” Chen said.

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She will also research the recent consolidation of health insurers and of health care providers and how that is impacting the consumer.

“As a result of such consolidation, not only is there a potential loss of consumer choice, but it gives the pricing power to insurers and health-care service suppliers,” Chen said. And those who argue health-care and insurance consolidation results in greater efficiencies have yet to document these gains or losses — something she intends to do.

Faculty belonging to the health policy centers will advise the PhD candidates. The students will take courses in health economics, health insurance and government program operations, health financing, international health policy and economic development, as well as the cost-effectiveness analysis of new medical technologies.

“The PhD program enables us to train clinicians and non-clinicians in state-of-the-art methods of health policy analysis,” said Douglas K. Owens, director of CHP/PCOR within the Freeman Spogli Institute of International Studies.

Coursework in the new program will also cover relevant statistical and methodological approaches to public health concerns such as obesity and chronic disease.

"Our PhD students will learn from faculty across the University who bring perspectives from economics, medicine, law, decision science, business and other disciplines," said Michelle Mello, a professor of law and professor of health research and policy at the School of Medicine. "They will become truly cross-disciplinary thinkers and problem solvers."

Learn more here. 

An aspirin a day may keep heart attacks and cancer away, according to new recommendations by a medical panel. But that doesn’t mean everyone should run to the drugstore without talking to his or her doctor first.

The U.S. Preventive Services Task Force, an independent panel of medical experts from around the nation, said Monday that taking aspirin can help 50- to 59-year-olds who are at increased risk of cardiovascular disease prevent heart attacks and strokes.

The panel also said that taking aspirin for at least five to 10 years could help prevent colorectal cancer. Individuals 60 to 69 may also benefit from aspirin, but the benefit is smaller than in people 50 to 59.

Because heart attacks are caused by blood clots in the arteries, aspirin can help prevent heart attacks and strokes that are caused by these clots.

It is the first time the task force has included both the evidence on preventing cardiovascular disease and colorectal cancer in developing recommendations on aspirin use in patients at high risk of cardiovascular disease.

Stanford Professor of Medicine Douglas K. Owens, a member of the task force, cautioned the new recommendations come with a caveat: a daily dose of aspirin can cause stomach and brain bleeds. People with stomach and liver problems, bleeding disorders or who are taking blood thinners, are at greater risk of experiencing the side effects of aspirin.

And, he emphasized, the new recommendations are for older adults and those with substantially elevated risk of cardiovascular disease.

Douglas K. Owens

“It is nuanced,” said Owens, director of the Center for Health Policy/Center for Primary Care and Outcomes Research. “Our recommendation applies to people who are at increased risk of heart disease and who do not have increased risk of bleeding complications.

He added that those risk assessments by physicians are extremely important.

The task force, an independent panel of experts in prevention and primary care appointed by the Department of Health and Human Services, said a “pragmatic approach” consistent with the evidence is to prescribe 81mg per day, or one baby aspirin, which is the most commonly prescribed dose.

“Each person has only one decision to make — whether or not to take aspirin for prevention,” said Owens. “To help individuals and their clinicians make this decision, the task force integrated the evidence about the use of aspirin to prevent cardiovascular disease and colorectal cancer into one recommendation on the use of aspirin.”

But the task for also concluded that it doesn’t have enough to current evidence to assess the balance of benefits and harms of aspirin use in adults younger than age 50 and those older than 70.

The draft guidelines, which are open for public comment on the task force website, have provoked criticism by some cardiologists and physicians who are concerned that healthy Americans who start taking aspirin on a daily basis could expose themselves to the drug’s negative side effects, such as stomach bleeding and hemorrhagic strokes.

And the Food and Drug Administration wrote last year that it had reviewed studies on the use of aspirin for primary prevention of a heart attack “and did not find sufficient support for the use of aspirin.” The agency did say, however, it was awaiting results of additional clinical trials.

Owens said that while the FDA looked at aspirin to prevent an initial heart attack or stroke, “the task force looked at evidence for the broader benefits of aspirin to reduce heart attacks, strokes and colorectal cancer.”

In addition, Owens said, the evidence review for the task force included a wide variety of research, including meta-analyses, which may not have been included in the FDA review. The task force commissioned three systematic reviews, he said, as well as a sophisticated modeling study to help integrate the evidence about cardiovascular disease and cancer.

So what’s the bottom line? Consult your physician.

Because, as task force vice chair Dr. Kirsten Bibbins-Domingo said, “Taking aspirin is easy, but deciding whether or not to take aspirin for prevention is complex.”

Listen to Owens' interview on NPR's Morning Edition.