Less than a Quarter of Physicians Can Accurately Estimate Out-of-Pocket Drug Costs

Written by Lucia Mueller | Reviewed by Gabriel Levitt, MA | Posted November 24, 2021

Can physicians accurately estimate a patient’s out-of-pocket expenses if they are given all the necessary information about a drug’s price and the patient’s insurance plan?”

This is the question a recent Journal of the American Medical Association (JAMA) study sought to answer, finding that only 21% of the surveyed primary care physicians, gastroenterologists, and rheumatologists could accurately estimate out-of-pocket drug costs. Those results are grim, especially given the fact that these docs were provided with their patient’s drug’s price and an insurance plan’s cost-sharing mechanisms, including deductibles, copays, coinsurance, and out-of-pocket maximums. 

It’s imperative that physicians of all specialties be familiar with the cost of care -- and that includes the ever-increasing financial burden of prescribed drugs. One-third of U.S. residents find paying their medical bills to be daunting. Many patients struggle to afford their medications and are known to cut pills in half, ration insulin, or forego filling their prescriptions altogether. It’s only logical that these patients often turn to their prescribing providers hoping to find expertise in navigating insurance coverage -- or lack thereof. Yet this survey illustrates that their hopes are often misplaced. I find the results particularly upsetting given how many patients I, myself, have told over the years (like a televised drug advert) to “talk to their doctor about prescribing a cheaper generic alternative.” One would hope that the patient-doctor relationship would hold the key to the healthiest, most affordable option for care.

In the study, physicians were asked to estimate the drug’s out-of-pocket cost at four separate points between January and December, using the patient’s insurance plan’s four types of cost-sharing: 

  1. Deductibles
  2. Coinsurance 
  3. Copays
  4. Out-of-Pocket Maximums

Each one of those words makes my skin crawl, perhaps due to the looming frustration their mere mention brings. The study shows that the interplay of these payment types is what makes it complex for providers to calculate out-of-pocket costs. When physicians were able to estimate each one individually, the results were less abysmal compared to  estimating all four correctly:

  • 52% of physicians accurately estimated costs before the deductible was met
  • 62% accurately used coinsurance information
  • 61% accurately used copay information
  • 57% accurately estimated costs once the out-of-pocket maximum was met
  • Only 21% of physicians answered all four correctly

JAMA’s findings suggest that “increased price transparency and simpler insurance cost-sharing mechanisms are needed to enable informed cost conversations at the point of prescribing.”

Physicians want to do better. The good news is that most of the respondents -- 74% -- believed that they have an obligation to initiate cost conversations. And, paired with their lackluster attempts to accurately estimate patient costs, 77% admitted difficulty in advising patients of out-of-pocket costs. Hey, awareness of a blind spot is half the battle! So, what are the barriers here? According to the physicians:

  • Insufficient time (76%)
  • Insufficient knowledge (69%)
  • Discomfort with the conversations (41%)

Sixty-three percent reported their patients expected them to solve their cost-related issues. I’ll interject with what I believe to be the obvious: Patients expect prescribers to solve cost issues because, when you are faced with a hefty price tag on your health, it’s almost an out-of-body, unbelievable situation. Surely, this can’t be the case. Someone, most likely my doctor, should be able to help. Drug pricing in the U.S. can be so high or so confusing, it can be maddening. And, when only 21% of physicians can explain the cost of care, it really can feel like a whole world gone mad.

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