Paying Patients To Switch: Impact Of A Rewards Program On Choice Of Providers, Prices, And Utilization

Individualized Out-of-Pocket Price Estimators for "Shoppable" Surgical Procedures: A Nationwide Cross-Sectional Study of US Hospitals

To estimate the nationwide prevalence of individualized out-of-pocket (OOP) price estimators at US hospitals, characterize patterns of inclusion of 14 specified "shoppable" surgical procedures, and determine hospital-level characteristics associated with estimators that include surgical procedures.

Background

Price transparency for shoppable surgical services is a key requirement of several recent federal policies, yet the extent to which hospitals provide online OOP price estimators remains unknown.

Methods

We reviewed a stratified random sample of 485 U.S. hospitals for the presence of a tool to allow patients to estimate individualized OOP expenses for healthcare services. We compared characteristics of hospitals that did and did not offer online price estimators and performed multivariable modeling to identify facility-level predictors of hospitals offering price estimator with and without surgical procedures.

Results

Nearly two-thirds (66.0%) of hospitals in the final sample (95% confidence interval 61.6%-70.1%) offered an online tool for estimating OOP healthcare expenses. Approximately 58.5% of hospitals included at least one shoppable surgical procedure while around 6.6% of hospitals included all 14 surgical procedures. The most common price reported was laparoscopic cholecystectomy (55.1%), and the least common was recurrent cataract removal (20.0%). Inclusion of surgical procedures varied by total annual surgical volume and health system membership. Only 26.9% of estimators explicitly included professional fees.

Conclusions

Our findings highlight an ongoing progress in price transparency, as well as key areas for improvement in future policies to help patients make more financially informed decisions about their surgical care.

Paying patients to use lower-priced providers

OBJECTIVE

Many employers have introduced rewards programs as a new benefit design in which employees are paid $25-$500 if they receive care from lower-priced providers. Our goal was to assess the impact of the rewards program on procedure prices and choice of provider and how these outcomes vary by length of exposure to the program and patient population.

STUDY SETTING

A total of 87 employers from across the nation with 563,000 employees and dependents who have introduced the rewards program in 2017 and 2018.

STUDY DESIGN

Difference-in-difference analysis comparing changes in average prices and market share of lower-priced providers among employers who introduced the reward program to those that did not.

DATA COLLECTION METHODS

We used claims data for 3.9 million enrollees of a large health plan.

PRINCIPAL FINDINGS

Introduction of the program was associated with a 1.3% reduction in prices during the first year and a 3.7% reduction in the second year of access. Use of the program and price reductions are concentrated among magnetic resonance imaging (MRI) services, for which 30% of patients engaged with the program, 5.6% of patients received an incentive payment in the first year, and 7.8% received an incentive payment in the second year. MRI prices were 3.7% and 6.5% lower in the first and second years, respectively. We did not observe differential impacts related to enrollment in a consumer-directed health plan or the degree of market-level price variation. We also did not observe a change in utilization.

CONCLUSIONS

The introduction of financial incentives to reward patients from receiving care from lower-priced providers is associated with modest price reductions, and savings are concentrated among MRI services.

An Employer-Provider Direct Payment Program Is Associated With Lower Episode Costs

Bundled payment has shown promise in reducing medical spending while maintaining quality. However, its impact among commercially insured populations has not been well studied. We examined the impacts on episode cost and patient cost sharing of a program that applies bundled payments for orthopedic and surgical procedures in a commercially insured population. The program we studied negotiates preferred prices for selected providers that cover the procedure and all related care within a thirty-day period after the procedure and waives cost sharing for patients who receive care from these providers. After implementation, episode prices for three selected surgical procedures declined by $4,229, a 10.7 percent relative reduction. Employers captured approximately 85 percent of the savings, or $3,582 per episode (a 9.5 percent relative decrease), and patient cost-sharing payments decreased by $498 per episode (a 27.7 percent relative decrease).

Physician agency, consumerism, and the consumption of lower-limb MRI scans

We study where privately insured individuals receive planned MRI scans. Despite significant out-of-pocket costs for this undifferentiated service, privately insured patients often receive care in high-priced locations when lower priced options were available. The median patient in our data has 16 MRI providers within a 30-minute drive of her home. On average, patients bypass 6 lower-priced providers between their homes and their actual treatment locations. Referring physicians heavily influence where patients receive care. The share of the variance in the prices of patients' MRI scans that referrer fixed effects (52 percent) explain is dramatically greater than the share explained by patient cost-sharing (< 1 percent), patient characteristics (< 1 percent), or patients' home HRR fixed effects (2 percent). In order to access lower cost providers, patients must generally diverge from physicians' established referral patterns.