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Escalating Health Care Cost due to Unnecessary Diagnostic Testing MUHAMMAD AZAM ISHAQUE CHAUDHARY*, AND ASIM NISAR**

RECEIVED ON 12.05.2016 ACCEPTED ON 16.08.2016

ABSTRACT

Focusing on health care systems can improve health outcomes now and in the future. Growing economies

have serious concerns on the rising cost of health, whereas, in under developed countries like Pakistan,

it is not emphasized yet at all. The research is conducted to improve a unique aspect of health care

systems to provide effective, patient-centred, high-standard health care while maintaining the cost

effectiveness. Research is being qualified in two paradigms qualitative and quantitative. In qualitative

research, expert’s interviews have been taken to get the basic knowledge of radiology based testing and

their prerequisites, in quantitative research ordered are being analysed to check the frequency and if

they are unnecessary or qualified medical necessity guidelines as established in qualitative method.

Analysis was made on the basis of the trinity relationship of diagnosis, symptoms and respected order to

determine the necessity of the order to get its impact on cost of the overall health of those patients and

point out more than 50% unnecessary orders are being performed in two government hospitals. The

situation is alarming and policy makers should focus on unnecessary ordering to avoid out of pocket

expenses and improve quality of care. The research helps in successful application of health care system

modifications and policies pertaining to one aspect of health systems, i.e. cost-effectiveness of health

care.

Key Words: Cost-Effective, Health System, Radiology Orders.

* Department of Engineering Management, Center for Advanced Studies in Engineering, Islamabad. * * Asian Institute of Technology, Thailand.

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1. INTRODUCTION

what resources are required. Health systems and health

systems research leads to the creation of scaffold that

must satisfy the demands and needs of its constantly

dynamic building blocks. Health care is a management,

treatment and prevention of disease or illness; it also

refers to the physical well being through health service

providers and hospitals. How are you? It is that simple

question which is being asked by every two humans

when they meet. This simply relates the concern of one

to another about knowing his/her current physical,

H uman minds have a limited ability to grasp

and process multiple pieces of information

simultaneously, but they desire to produce

more to reap more benefits. A high level of productivity

requires dropping the quantity/extent of information to

be analyzed every time to only the most necessary and

vital data. Developing a regular routine work in advance

leads to the creation of frameworks, and sticking to it

consistently wipes away the difficulty of thinking about

what needs to be done, its sequence, and when and

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Escalating Health Care Cost due to Unnecessary Diagnostic Testing

mental, financial and social status. We are concerned

here about the physical and mental health of human

beings that is one of the top concerns of humanity.

Nowadays quality of care has become too expensive

[1]. Not everyone can easily afford it. Health care

expenditures are growing around the world in an alarming

rate. The United States spends 17% of their GDP (Gross

Domestic Product). They are forecasted to reach 20.3%

of their GDP which equals to $4.4 Trillion dollars [2].

OECD (Organization for Economic Cooperation and

Development) countries average spending more than

7% of their GDP [3]. Such an alarming rise creates many

risks for the sustainability of the future of health of the

world. Now the question is where the health care cost

goes? There are various ways to see health expenditures,

although it is clear that cost may be increasing due to

increasing cost of drugs and medicine, increasing rate

of emergency to inpatient ratio, and excessive laboratory

testing’s [4]. Due to technological advancement doctors

start relying on technology to diagnose problem and

that increases the cost. Our focus is to highlight

expensive laboratory testing in Pakistan and see if these

are being ordered right with proper diagnosis along with

chief complaint or if it is just a wastage of money and

resources. Such research has never been conducted in

Pakistan before that may help policymakers to establish

certain policies pertaining to health systems to improve

overall health of individuals along with decreased cost

of care.

2. LITERATURE REVIEW

Pakistan is currently 6th most populous country with a

population of more than 191 million people and an annual

growth rate of 4% per annum. No satisfactory attention was

given till the 1970’s. Afterthat a 5 year plan was introduced

to take care of infrastructural growth, but it was still limited

to the government employees and the total spending was

only 1% of the GDP. The rest was an out of pocket expense

[5]. According to WHO (World Health Organization), they

defined Health as a state of absence of any disease and a

complete wellbeing “physically and mentally” [6]. Health

system is defined in several ways. “WHO’s defines “Health

Systems” as “All activities with the primary objective to

promote reinstate or maintain health”. All such activities are

usually grouped into six classes that include service delivery

as well as, the health workforce, including health information

system related Medical products, vaccines and technologies,

health system financing and governance with right kind of

leadership [7]. The another way of defining Health systems

is based on the actors contributing to the system. Van

Atteveld et. al. [8] reviewed 144 studies on health care and

global health research. They concluded that most of the

studies lacked analytical models mostly descriptive,

economic approach dominated, and there were no

comparison among different systems.

Alliance for health policy and system research studied and

listed 41 health system frameworks developed till now [6]

few have been developed for better knowledge, comparisons

among different frameworks their performance [9].

Researchers believe that nowadays medicine has prompted

communication among each other and different nations

readily borrow ideas from another country’s experiences.

According to their own cultural setting they alter and modify

ideas. But due to procedural variations among them and

different structures of individual nations, developing an

appropriate analytic framework that is good for everyone is

yet to be done. There is no particular system or framework

that covers all aspects of healthcare. The background of

each healthcare system has its own dependence on several

actors and environment which fails to create a basis for all

[10]. Common health fund recently published a study by

comparing 18 different health systems around the world but

are still unable to provide any specific system that fits for all

[11]. In a recent comparison of health care systems around

the world, it was evident that caring needs are touching high

Escalating Health Care Cost due to Unnecessary Diagnostic Testing

Mehran University Research Journal of Engineering & Technology, Volume 36, No. 3, July, 2017 [p-ISSN: 0254-7821, e-ISSN: 2413-7219] 5 7 1

expectations and viz a viz cost containment is also required

including laboratory services for a sustainable growth in

health care services [12].

The question frequently raised in health policy debates is,

“Will health systems be financially sustainable in future?” It

is usually termed as the ability of the governments and others

to sufficiently finance health care in the face of growing cost

pressures, with the following three most commonly cited

challenges named as population ageing, innovation or new

technologies and quality of care which is consumer

expectations around the world. Although the idea of

‘financial sustainability’ comes into view to be vital to health

policy debates, but still it has not been part of most health

system objectives, including those of the WHO’s health

system performance framework” [6].

The problem of financial sustainability can be broadly

characterized in the following three ways which includes

increased health expenditure due to demand and supply of

health services, technological progress, demographic

changes and consumer expectations. Some believe limited

resources or an inability of government or unwillingness

to generate sufficient resources to meet its health system

obligations which might be due to financial crisis [13].

Substantial research has been done by different institutes

and researchers on why health care costs are raising across

the globe. The factors that get most attention are connected

with the increasing volume of services used. These include

the following parameters coupled with rising income and

expectations are technology advancement, population

ageing and changing utilization patterns. Although it

depends upon country as per their clinical setting,

operating methods, and specific case evaluated, studies

have evidently reported that up to 40% of lab testing can

be considered as wasteful [14-17].

It is evident from the analysis and projections that the

population ageing contributes comparatively less to rising

health care costs in comparison to technological

modernization (10% less of the growth in health care costs)

[18-20]. Health care expenditures are rising in at alarming

rate. Advancement in technology is one of the key factors in

raising heath care cost which is laboratory orders [21]. From

2005-2010 it is evident that laboratory testing cost increased

by 29% of the total health care cost in United States [22]. Fig.

1 shows Health expenditures as a share of GDP of OECD

countries.

FIG. 1. HEALTH EXPENDITURE AS A SHARE OF GDP OECD COUNTRIES 2015 [23]

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Escalating Health Care Cost due to Unnecessary Diagnostic Testing

Getting quality of care is the right of every human in this

world but nowadays cost of health care is becoming a raising

issue as quality of care is directly proportional to the cost of

health care. This relationship forced policy makers, and

researchers to devise a strategy of lowering the costs. Now

some suggest to see health care professionals other than

doctors, and put emphasis on telemedicine, and believe that

a cure is better than care [24].

Because of rising healthcare costs, USA took few steps to

control the rising cost of healthcare. Successful efforts were

made for the mandatory use of electronic health records,

along with introducing physicians quality reporting system,

and creating medical necessity policies as to check and

perform an analysis whether the service is planned to deliver

medically required/ necessary for the patient or it is not

required. Emanuel elaborates that simply by reducing

avoidable health complications, there could be more than

10% of saving per year [25].

3. RESEARCH GAP

Currently top spending nations are following utilization

pattern to regulate care needs and see whether the service is

required or not. This concluded to be creating local coverage

policies, but it happens when some specific area or people

start providing that kind of services. There is a requirement

to check and analyze the patterns on laboratory orders and

specifically high cost orders that are made to contain cost in

health care. This research specifically focuses on Pakistan

to check if unnecessary tests have been ordered as compare

to the rest of the world and devise a strategy to stop

unnecessary testing and create check and balance to reduce

wastage of money and resources.

4. RESEARCH METHODOLOGY AND DATA ANALYSIS

Research is being qualified in two paradigms qualitative and

quantitative. In qualitative research, expert’s interviews have

been taken to get the basic knowledge of radiology based

testing and their prerequisites. Question were being asked

with respect to the specialty and create a basic understanding

of why imaging orders have been placed and study all those

procedures in which medical decision making are involved.

Research methodology of the paper is be described as

shown in Fig. 2.

FIG. 2. RESEARCH METHODOLOGY FLOW DIAGRAM

Escalating Health Care Cost due to Unnecessary Diagnostic Testing

Mehran University Research Journal of Engineering & Technology, Volume 36, No. 3, July, 2017 [p-ISSN: 0254-7821, e-ISSN: 2413-7219] 5 7 3

We initiated the research with a simple question that whether

in Pakistan the radiology orderings are based on medical

necessity or not? In order to get the answer of the question

the research methodology selected was qualitative and

quantitative. The qualitative research was conducted

through interviewing physicians about the radiology

orderings and its basics that can be seen from Fig. 3. The

quantitative research helped us to compile relevant and

specific data and analyze it for findings that can be seen

from Fig. 4.

On the basis of qualitative research, quantitative research

was carried out in which retrospective data of radiology

investigation was collected for six months from two reputed

government hospitals of Islamabad and Rawalpindi.

Methodology used to understand and investigate the domain

and problem respectively is shown in Fig. 3.

Light blue ordering techniques were selected as primary

source of investigation because of the fact that these are

most ordered procedures are costly as well.

After qualitative research data collection was carried out to

investigate whether unnecessary tests was being ordered

or not. This methodology is described as shown in Fig. 4.

The underlined research methodology helped us to gather

data pertaining to the distinct radiology orders. Total number

of orders which had considerable information documented

were 2395.All the imaging studies were being ordered by

different physicians including x-ray, ultrasound, MRI

(Magnetic Resonance Imaging) and CT (Computed

Tomography) scan and other laboratory orders but only

MRI and CT scan were included in this study. These radiology

orders were charted on the basis of cost as these were the

FIG. 3. QUALITATIVE METHOD FLOW DIAGRAM

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Escalating Health Care Cost due to Unnecessary Diagnostic Testing

most expensive laboratory diagnostic orders. First total

number of MRI and CT scan were identified other than

emergency patients. Only inpatient and outpatient facility

were taken in this study. The reasons of prescribing MRI/

CT scan were identified. Analysis was made and following

were the results. Table 1 shows total MRI/ CT scan stats.

Data shows that CT scans were ordered more on female

whereas more MRI ordered on males. Total 166 MRI/CT

Scan orders were analyzed. These are all being ordered

in outpatient and inpatient facility. None of the order

were based on monitoring was analyzed. Then analysis

were made on the basis of symptomology in each gender

as shown in Table 2 to identify reason of unnecessary

orders.

Table 2 shows diagnosis/complaints on which various

orders have been made, but out of 166 orders data,

showed that 99 orders were placed due to user defined

complaints without prior physician’s clinical evaluation

to justify the test requirement and medical necessity.

Although very less document evident exists, at the

time of order reason were not clearly written or

identified. Rest 67 orders have rational of being

prescribed.

5. RESULTS

Most of conclusion/findings of the study showed normal

study which creates an alarming situation and proof the

concept of unnecessary orders have been performed in

Pakistan as well. As stated above, researchers believe

40% of laboratory testing is unnecessary but in case of

Pakistan data shows more than 50% of testing is

unnecessary. As shown in Fig. 5, data showed that out of

166 studies, 77 studies findings were normal and 17

findings were unknown because of some technical issue

or tests not performed well. According to experts these

77 studies which ere found normal can be further reduced

by careful clinical examination.

As shown in Fig. 6 maximum number of orders have

been made on user defined complaints. During interviews

most doctors said that when pateints vist them in service

doctor most of them answered as patient visit us in

severe painan order of MRI and or CT scan was most

commonly ordered.

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TABLE 1. MRI/CT SCAN ORDERED STUDIED

FIG. 4. QUANTITATIVE METHOD FLOW DIAGRAM

Escalating Health Care Cost due to Unnecessary Diagnostic Testing

Mehran University Research Journal of Engineering & Technology, Volume 36, No. 3, July, 2017 [p-ISSN: 0254-7821, e-ISSN: 2413-7219] 5 7 5

From Figs. 5-6 results shows that more than 50% of the

diagnostic orders made were unnecessary (combining the

normal findings and unknown findings together), this all

adds extra burden to financial cost. Country like Pakistan

if we analyze last seven years i.e. (since 2007-2008 Rs. 60

billion to 2013-2014 Rs. 102 billion) have been allocated

for the health sector, which is merely equal to 1% of their

GDP. Recently Government of Pakistan has also allocated

Rs. 2/- Billion under Prime Minister National Health

Program to become a welfare state without having any

policies in place and check and monitoring of quality of

care. By analyzing above findings there is a need of expert

system be designed to formulate policies to stop

unnecessary testing and save cost. Orders should be

prescribed as per medical necessity guidelines and if

proper documentation and history of the patient

formulates the basis of order then test should be

performed, otherwise it should be referred to the review

process. This way unnecessary radiation exposure can

be reduce and out of pocket expenses can also be

minimized.

6. RESEARCH LIMITATIONS

Medical necessity applies to all aspects of practicing

medicine but the scope of this research limits its boundaries

by focusing only on medical necessity of imaging orders.

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TABLE 2. MRI/CT SCAN ORDER DIAGNOSIS DETAILS

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Escalating Health Care Cost due to Unnecessary Diagnostic Testing

FIG. 5. MRI/ CT SCAN RESULTS FINDINGS

FIG. 6. SYMPTOMOLOGY GRAPH W.R.T MRI AND CT SCAN ORDERS

7. CONCLUSIONS

The rapid growth in the medical sciences has kept things

difficult for the human beings to cope up with the changing

domain knowledge. From very basic of surgery to basic

body checkup, medical practices have taken a new turn.

The core reason is the ongoing research throughout the

world that is adding valuable information about human

body. With the changing medical practices, it is imperative

that the associated procedures must also evolve. There

are various phases of evolution that have taken place in

medical practices, however, the need of a standardized

medical practice has still remained a key challenge. In

earlier days, physicians generally relied on the physical

check up to determine the root cause of any disease.

With the advancement in technology and availability of

modern day equipment, the reliance has generally reduced

on physical checkups. Rather all the physicians generally

rely on medical tests for determining the root cause of a

disease. This research opens a new era of cost

containment in health care industry. Policy makers and

healthcare financial analysts will get benefited from it to

lower down the cost of providing care by developing

knowledge base decision support system. Health care

insurances will also get benefited from the research to

evaluate the healthcare claims. This is one of the biggest

reason that no insurances are covering health care

benefits as without check and balance, anyone can order

any kind of expensive or inexpensive testing without

documenting a proper diagnosis. More than 50% of orders

that have been made will be an eye opening situation for

the policy holders. Any test that have been ordered must

comply medical necessity guidelines, and be placed after

clinical examination which will reduce unnecessary

exposure to the radiations and healthcare cost. Experts

have the opinion that a clinical perspective of medical

necessity is very rare, it merely goes with the

organizational culture desire and most often influenced

by the physicians and lied in the health care compliance

context. It is very important here to understand that if a

service rendered to a patient that is not medically

demanded, it can save money if some framework or

policies have been implemented to monitor the care

delivery process. Cost effectiveness of the health care

system needs to be prioritized throughout the world,

especially in developing countries like Pakistan, where

more than 50% of people are below the poverty line.

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Mehran University Research Journal of Engineering & Technology, Volume 36, No. 3, July, 2017 [p-ISSN: 0254-7821, e-ISSN: 2413-7219] 5 7 7

Morbidity and mortality rate can be reduced by

emphasizing on treatment rather than unnecessary

investigation.

8. FUTURE RESEARCH

Future research can be carried out on unnecessary

prescription and other laboratory orders to improve health

care in Pakistan and decrease cost of care. Such research

analysis forms the basis for policy makers to design effective

policies for better health care.

ACKNOWLEDGEMENTS

Authors are highly thankful to Higher Education

Commission of Pakistan, for the provision of scholarship

for higher education and research. Authors are grateful

to anonymous reviewers, for reviewing the paper along

with editorial board and providing valuable feedback.

Authors also acknowledge the hospitals and doctors who

shared clinical data and played a key role to successfully

complete this research.

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