patient paying for care and handing a credit card over to a medical professional

The issue of rising health care costs continues to vex policymakers, health care providers and those who pay for health care. Among the proposed and tested solutions are policies that try to incentivize consumer price shopping, such as price transparency, the use of high-deductible health plans in the insurance market, and the use of reference pricing – when patients pay the full difference between a provider’s price and some previously set price cap. But health care is not a typical consumer good, and numerous barriers exist. Not all procedures are ‘shoppable’ – for example the need for emergency care -  pricing information can be difficult to access, highly variable, and procedures many require referrals or pre-authorization, that further limits ‘choice.’

New research from Whaley et al in the journal Health Services Research builds on a prior pilot program to understand the potential and interactions of one approach –rewards programs - to nudge consumers toward the selection of lower priced services. Using data on 3.9 million enrollees of the Health Care Services Corporation (HCSC), and comparing results to a previous pilot from the same insurer, researchers considered whether HCSC’s reward program could maintain its impact as it was expanded to a larger patient population as well as:

  • how the program reduced prices as patients became more familiar with the program over time, and,
  • how it interacted with other health plan and market forces, such as the interaction with Consumer Directed Health Plans.  

The HCSC program required that patients use an online price transparency tool or phone support line to search for price information before a procedure. It then provided financial incentives ranging from $25 to $500, depending on the procedure, for eligible selections of lower priced providers.

The researchers found that the rewards program produced modest reductions in prices, that participation and impact increased over time, and that the greatest cost reductions tended to be concentrated among the use of magnetic resonance imaging (MRI) services. Further, the program’s impact did not appear to be affected by enrollees use of high-deductible health plans or the magnitude of variation in prices between different markets. The researchers were unable to estimate whether the program was overall cost savings because they did not have access to the cost of implementation and administration of the program.

Overall, the researchers suggest that to be successful long-term, future cost reducing innovations need to be “both commonly used by patients and lead to behavioral changes.”

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Kristin Rosengren

Vice President, Strategic Communications - AcademyHealth

Kristin Rosengren is Vice President, Strategic Communications, and co-director of the AcademyHealth Translatio... Read Bio

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