Accuracy of Physician Estimates of Out-of-Pocket Costs for Medication Filling

Abstract

Importance: One-third of US residents have trouble paying their medical bills. They often turn to their physicians for help navigating health costs and insurance coverage.

Objective: To determine whether physicians can accurately estimate out-of-pocket expenses when they are given all of the necessary information about a drug's price and a patient's insurance plan.

Design, setting, and participants: This national mail-in survey used a random sample of US physicians. The survey was sent to 900 outpatient physicians (300 each of primary care, gastroenterology, and rheumatology). Physicians were excluded if they were in training, worked primarily for the Veterans Administration or Indian Health Service, were retired, or reported 0% outpatient clinical effort. Analyses were performed from July to December 2020.

Main outcomes and measures: In a hypothetical vignette, a patient was prescribed a new drug costing $1000/month without insurance. A summary of her private insurance information was provided, including the plan's deductible, coinsurance rates, copays, and out-of-pocket maximum. Physicians were asked to estimate the drug's out-of-pocket cost at 4 time points between January and December, using the plan's 4 types of cost-sharing: (1) deductibles, (2) coinsurance, (3) copays, and (4) out-of-pocket maximums. Multivariate linear regression was used to assess differences in performance by specialty, adjusting for attitudes toward cost conversations, demographics, and clinical characteristics.

Results: The response rate was 45% (405 of 900) and 371 respondents met inclusion criteria. Among the respondents included in this study, 59% (n = 220) identified as male, 23% (n = 84) as Asian, 3% (n = 12) as Black, 6% (n = 24) as Hispanic, and 58% (n = 216) as White; 30% (n = 112) were primary care physicians, 35% (n = 128) were gastroenterologists, and 35% (n = 131) were rheumatologists; and the mean (SD) age was 49 (10) years. Overall, 52% of physicians (n = 192) accurately estimated costs before the deductible was met, 62% (n = 228) accurately used coinsurance information, 61% (n = 224) accurately used copay information, and 57% (n = 210) accurately estimated costs once the out-of-pocket maximum was met. Only 21% (n = 78) of physicians answered all 4 questions correctly. Ability to estimate out-of-pocket costs was not associated with specialty, attitudes toward cost conversations, or clinic characteristics.

Conclusions and relevance: This survey study found that many US physicians have difficulty estimating out-of-pocket costs, even when they have access to their patients' insurance plans. The mechanics involved in calculating real-time out-of-pocket costs are complex. These findings suggest that increased price transparency and simpler insurance cost-sharing mechanisms are needed to enable informed cost conversations at the point of prescribing.

Figure 1.. Vignette Assessing Physicians’ Ability to Estimate Out-of-Pocket Costs

This figure shows the vignette that primary care physicians received. In the vignette that gastroenterologists received, the medication was adalimumab. In the vignette that rheumatologists received, the medication was tofacitinib. Four questions asked physicians to estimate how much the patient would have to pay out of pocket at 4 time points between January and December. Physicians were told that the patient consistently picked up her medications every month. The aim of the 4 questions tied to the vignette was to capture physicians’ ability to estimate out-of-pocket costs using 4 types of insurance cost-sharing: (1) deductibles, (2) coinsurance, (3) copays, and (4) out-of-pocket maximums. The insurance information is presented in the same format used by insurance plans available on the HealthCare.gov website. The insurance plan ran from January to December and the new drug was listed as tier 4 on the plan’s formulary. The first question asked how much she would pay for the tier 4 drug in January. In January, she would not have met her deductible of $2000, so she would have to pay the full price of the drug: $1000. The second question asked how much she would pay for the drug in March. By this time, she would have met her deductible by paying $1000 in January and $1000 in February, so she would owe the coinsurance for tier 4 drugs (50%): $500. The third question asked how much she would pay for 3 other tier 1 drugs available through an outpatient pharmacy benefit in March. Her insurance plan indicated a $20 copay per tier 1 drug, so she would owe a total of $60 for these 3 drugs. Finally, the fourth question asked how much she would pay for the new drug in December. By then, she would have met her out-of-pocket maximum of $6000, so she would owe nothing for the drug ($0).

Figure 2.. Proportion of Physicians Answering Each Insurance Coverage Question Correctly, by Specialty

Overall, 192 physicians (52%) accurately estimated the tier 4 drug’s out-of-pocket cost before the deductible was met; 228 (62%) accurately used coinsurance information to estimate the drug’s out-of-pocket cost once the deductible was met; 224 (61%) accurately used drug copay information to estimate the out-of-pocket costs of 3 other tier 1 drugs; and 210 (57%) accurately estimated the tier 4 drug’s out-of-pocket cost once the out-of-pocket maximum was met.

Figure 3.. Overall Number of Insurance Coverage Questions Answered Correctly

Approximately three-quarters of physicians (74%) answered at least 2 questions correctly, but only 51% (n = 188) answered 3 questions correctly and 21% (n = 78) answered all 4 questions correctly. Three respondents with missing responses to all 4 vignette questions were excluded.