Background: Pathology testing in Australia accounts for over $2.7 billion of annual Medicare benefits paid. While there is evidence of over-testing for some services, there is little understanding of what drives this variation.
Aim: To explore how costs of claims for pathology services vary according to the characteristics of general practices.
Methods: We used Medicare claims data for all pathology tests performed for a random 10% sample of Australian residents in 2014, who had ≥1 visit to a general practitioner (GP) (n=2,015,717). Mean cost per patient was calculated for provider practice communities (PPCs): groups of GPs analogous to practices, constructed using network analysis of shared patient care. Generalised linear models, adjusting for patient age and sex, were used to explore relationships between pathology costs and PPC characteristics including number of GPs, continuity of care to the PPC (‘patient loyalty’) and bulk-billing.
Results: Annual Medicare benefit costs for pathology tests ordered by each PPC ranged from $1.17 to $2,580.63 per patient (median $89.80, IQR $72.70-$111.98). In fully adjusted models, PPCs where patients had higher patient loyalty had significantly lower average Medicare expenditure for pathology tests, both overall and for common over-tested items (e.g. Vitamin D tests and full blood counts). Larger PPCs, and those that bulk-billed a greater proportion of services, also tended to have lower pathology costs per patient.
Conclusions: There was substantial variation in costs of pathology claims ordered according to PPC. Our findings suggest that greater coordination of care has the potential to reduce duplicate and unnecessary testing.