Shared decision-making lowers health care expenditures

Costs are lowest when patients are cared for by doctors of same racial or ethnic background

Shared decision-making is an increasingly popular approach to healthcare in which physicians and patients work together to arrive at treatment decisions that are best for the patient, using the patient’s values and preferences as well as evidence about available options.

A study led by Timothy T. Brown, of  UC Berkeley School of Public Health, found that shared decision-making isn’t just good medicine, it also saves money: As shared decision-making goes up by three percent, health expenditures go down by about 10 percent. This impact doubles when Latinx patients are seen by Latinx doctors; and triples when Black patients are seen by Black doctors.

The investigation, published today ahead-of-print in Medical Care, is the first national study to show a causal effect between shared decision-making and health care expenditures.

In the paper, Brown—a health economist and associate director for research at the Berkeley Center for Health Technology—and his co-authors also concluded that high-quality, shared decision-making can reduce health expenditures without harming overall physical or mental health, supporting an economic case for the recruitment and training of more Black and Latinx doctors for patients who prefer them.

“If patients trust their doctors to help them make good decisions, they are more comfortable and less likely to request a lot of extra care,” said Brown.

“We would like health policymakers to see that training more Black and Hispanic physicians, which would improve rates of racial-ethnic patient-physician concordance, not only improves medical care, but actually lowers health care expenditures,” he said. “Everybody wins.”

The investigators analyzed surveys of more than 60,000 patients from 2003 to 2017. They found that the presence or lack of shared decision-making had no impact on drug expenditures, physical or mental health, or inpatient use; but acknowledged that any such effects might take longer to show.

Vanessa B. Hurley, an assistant professor at Georgetown University School of Health, and a co-author of the study, said the findings about Black and Latinx patients having more trust in doctors from their own background was not surprising.

“If they happen to share a similar racial or ethnic background, that is harder to replicate with clinicians who are not of the same racial or ethnic background,” she said, noting cultural and language differences could affect the doctor-patient relationship.

It makes a strong argument for the development of policies that encourage more individuals of those backgrounds to enter the health profession, Hurley said.

“We’re very proud of the paper,” said Hurley. “We think it’s a really important contribution to the broader literature on shared decision-making, and certainly being able to show a causal link between shared decision-making and utilization and spending is significant on its own.

“If it turns out, as a lot of literature has tended to suggest, that those choices tend to be less expensive ones at the same time that they are aligned with patients’ treatment preferences, that’s certainly a benefit.”

This study is part of a larger project, which Brown said will next look at gender and race variation in shared decision-making, with regard to pain outcomes.

“Gender matters,” he said. “Gender drives the entire thing. You can guess which gender. Women listen to doctors more, so shared decision-making is far more effective for women than it is for men, at least for pain.”

Additional authors are: Hector P. Rodriguez, Jadyn Lee, Neel Gupta, Grace Toolsie, Sione Markarian and Sofia Valenzuela, of UC Berkeley School of Public Health.

Funding was provided by the National Institute for Health Care Management Foundation.  This paper was first presented at AcademyHealth Annual Research Meeting, Washington, DC on June 6, 2022. 

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