Reference-Based Benefits for Colonoscopy and Arthroscopy: Large Differences in Patient Payments Across Procedures but Similar Behavioral Responses

Does the Implementation of Reference Pricing Result in Reduced Utilization? Evidence From Inpatient and Outpatient Procedures

Reference pricing (RP) is an insurance design that can be used to incentivize patients to use low-price settings. While RP is not intended to affect overall utilization, it could unintentionally reduce utilization. We examined whether utilization was reduced when a large employer adopted RP for selected elective surgeries, including inpatient joint replacement surgery and outpatient cataract surgery, colonoscopy, and arthroscopic surgery. Data included a treatment group subject to RP implementation and a comparison group that was not. We applied autoregressive integrated moving average analysis as comparison-population interrupted time-series analysis to determine whether there were procedure reductions following RP implementation. We find no evidence of short-term decreases (within 3 months of RP implementation). However, we find very modest declines of approximately 14 (20%) fewer arthroscopic knee surgeries 6 months after RP implementation and 129 (17.2%) fewer colonoscopies 8 months after RP implementation. There were no declines in the other procedures examined.

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

Employers and insurers are experimenting with benefit strategies that encourage patients to switch to lower-price providers. One increasingly popular strategy is to financially reward patients who receive care from such providers. We evaluated the impact of a rewards program implemented in 2017 by twenty-nine employers with 269,875 eligible employees and dependents. For 131 elective services, patients who received care from a designated lower-price provider received a check ranging from $25 to $500, depending on the provider's price and service. In the first twelve months of the program we found a 2.1 percent reduction in prices paid for services targeted by the rewards program. The reductions in price resulted in savings of $2.3 million, or roughly $8 per person, per year. These effects were primarily seen in magnetic resonance imaging and ultrasounds, with no observed price reduction among surgical procedures.