Shared Decision-making Lowers Medical Expenditures and the Effect Is Amplified in Racially-Ethnically Concordant Relationships

Background:Racial-ethnic disparities are pervasive in health care. One mechanism that may underlie disparities is variation in shared decision-making (SDM), which encompasses high-quality clinician-patient communication, including deliberative discussions about treatment options. Objectives:To determine whether SDM has causal effects on outcomes and whether these effects are stronger within racial-ethnic concordant clinician-patient relationships. Research Design:We use instrumental variables to estimate the causal effect of SDM on outcomes. Subjects:A total of 60,584 patients from the 2003-2017 Integrated Public Use Microdata Series Medical Expenditure Panel Survey. Years 2018 and 2019 were excluded due to changes in the Medical Expenditure Panel Survey that omitted essential parts of the SDM index. Measures:Our key variable of interest is the SDM index. Outcomes included total, outpatient, and drug expenditures; physical and mental health; and the utilization of inpatient and emergency services. Results:SDM lowers annual total health expenditures for all racial-ethnic groups, but this effect is only moderated among Black patients seen by Black clinicians, more than doubling in size relative to Whites. A similar SDM moderation effect also occurs for both Black patients seen by Black clinicians and Hispanic patients seen by Hispanic clinicians with regard to annual outpatient expenditures. There was no significant effect of SDM on self-reported physical or mental health. Conclusions:High-quality SDM can reduce health expenditures without negatively impacting overall physical or mental health, supporting a business case for health care organizations and systems to improve racial-ethnic clinician-patient concordance for Black and Hispanic patients.